This paper reviews recent literature on bioenergy potentials in conjunction with available biomass conversion technologies. The geographical scope is the European Union, which has set a course for long term development of its energy supply from the current dependence on fossil resources to a dominance of renewable resources. A cornerstone in European energy policies and strategies is biomass and bioenergy. The annual demand for biomass for energy is estimated to increase from the current level of 5.7 EJ to 10.0 EJ in 2020. Assessments of bioenergy potentials vary substantially due to methodological inconsistency and assumptions applied by individual authors. Forest biomass, agricultural residues and energy crops constitute the three major sources of biomass for energy, with the latter probably developing into the most important source over the 21st century. Land use and the changes thereof is a key issue in sustainable bioenergy production as land availability is an ultimately limiting factor.

The scientific literature contains contrasting findings about the climate effects of forest bioenergy, partly due to the wide diversity of bioenergy systems and associated contexts, but also due to differences in assessment methods. The climate effects of bioenergy must be accurately assessed to inform policy‐making, but the complexity of bioenergy systems and associated land, industry and energy systems raises challenges for assessment. We examine misconceptions about climate effects of forest bioenergy and discuss important considerations in assessing these effects and devising measures to incentivize sustainable bioenergy as a component of climate policy. The temporal and spatial system boundary and the reference (counterfactual) scenarios are key methodology choices that strongly influence results. Focussing on carbon balances of individual forest stands and comparing emissions at the point of combustion neglect system‐level interactions that influence the climate effects of forest bioenergy. We highlight the need for a systems approach, in assessing options and developing policy for forest bioenergy that: (1) considers the whole life cycle of bioenergy systems, including effects of the associated forest management and harvesting on landscape carbon balances; (2) identifies how forest bioenergy can best be deployed to support energy system transformation required to achieve climate goals; and (3) incentivizes those forest bioenergy systems that augment the mitigation value of the forest sector as a whole. Emphasis on short‐term emissions reduction targets can lead to decisions that make medium‐ to long‐term climate goals more difficult to achieve. The most important climate change mitigation measure is the transformation of energy, industry and transport systems so that fossil carbon remains underground. Narrow perspectives obscure the significant role that bioenergy can play by displacing fossil fuels now, and supporting energy system transition. Greater transparency and consistency is needed in greenhouse gas reporting and accounting related to bioenergy.

The ongoing debate about costs and benefits of wood‐pellet based bioenergy production in the southeastern United States (SE USA) requires an understanding of the science and context influencing market decisions associated with its sustainability. Production of pellets has garnered much attention asUSexports have grown from negligible amounts in the early 2000s to 4.6 million metric tonnes in 2015. Currently, 98% of these pellet exports are shipped to Europe to displace coal in power plants. We ask, ‘How is the production of wood pellets in theSE USAaffecting forest systems and the ecosystem services they provide?’ To address this question, we review current forest conditions and the status of the wood products industry, how pellet production affects ecosystem services and biodiversity, and what methods are in place to monitor changes and protect vulnerable systems. Scientific studies provide evidence that wood pellets in theSE USAare a fraction of total forestry operations and can be produced while maintaining or improving forest ecosystem services. Ecosystem services are protected by the requirement to utilize loggers trained to apply scientifically based best management practices in planning and implementing harvest for the export market. Bioenergy markets supplement incomes to private rural landholders and provide an incentive for forest management practices that simultaneously benefit water quality and wildlife and reduce risk of fire and insect outbreaks. Bioenergy also increases the value of forest land to landowners, thereby decreasing likelihood of conversion to nonforest uses. Monitoring and evaluation are essential to verify that regulations and good practices are achieving goals and to enable timely responses if problems arise. Conducting rigorous research to understand how conditions change in response to management choices requires baseline data, monitoring, and appropriate reference scenarios. Long‐term monitoring data on forest conditions should be publicly accessible and utilized to inform adaptive management.