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The global growth in energy demand continues, but the way of meeting rising energy needs is not sustainable. The use of biomass energy is a widely accepted strategy towards sustainable development that sees the fastest rate with the most of increase in power generation followed by strong rises in the consumption of biofuels for transport. Agriculture, forestry and wood energy sector are the leading sources of biomass for bioenergy. However, to be acceptable, biomass feedstock must be produced sustainably. Bioenergy from sustainably managed systems could provide a renewable and carbon neutral source of energy. Bioenergy systems can be relatively complex, intersectoral and site- and scale-specific. The environmental benefits of biomass-for-energy production systems can vary strongly, depending on site properties, climate, management system and input intensities. Bioenergy supply is closely linked to issues of water and land use. It is important to understand the effects of introducing it as well as it is necessary to promote integrated and synergic policies and approaches in the sectors of forestry, agriculture, energy, industry and environment. Biofuels offer attractive solutions to reducing GHG emissions, addressing energy security concerns and have also other socio-economic advantages. Currently produced biofuels are classified as first-generation. Some first-generation biofuels, such as for example ethanol from corn possibly have a limited role in the future transport fuel mix, other ones such as ethanol from sugarcane or biodiesel made from oils extracted from rerennial crops, as well as non-food and industrial crops requiring minimal input and maintenance and offering several benefits over conventional annual crops for ethanol production are promising. Sugarcane ethanol has greenhouse gas (GHG) emissions avoidance potential; can be produced sustainably; can be cost effective without governments support mechanisms, provide useful and valuable co-products; and, if carefully managed with due regard given to sustainable land use, can support the drive for sustainable development in many developing countries. Sugarcane ethanol - currently the most effective biofuel at displacing GHG emissions - is already mitigating GHGs in Brazil. Jatropha curcas L., a multipurpose, drought resistant, perennial plant has gained lot of importance for the production of biodiesel. However, it is important to point out that nearly all of studies have overstated the impacts of first-generation biofuels on global agricultural and land markets due to the fact that they have ignored the role of biofuel by-products. However, feed by-products of first-generation biofuels, such as dried distillers grains with soluble and oilseed meals are used in the livestock industry as protein and energy sources mitigates the price impacts of biofuel production as well as reduce the demand for cropland and moderate the indirect land use consequences. The production of second generation biofuels is expected to start within a few years. Many of the problems associated with first-generation biofuels can be solved by the production of second generation biofuels manufactured from abundant ligno-cellulosic materials such as cereal straw, sugar cane bagasse, forest residues, wastes and dedicated feedstocks (purpose-grown vegetative grasses, short rotation forests and other energy crops). These feedstocks are not food competitive, do not require additional agricultural land and can be grown on marginal and wasteland. Depending on the feedstock choice and the cultivation technique, second-generation biofuel production has the potential to provide benefits such as consuming waste residues and making use of abandoned land. As much as 97-98% of GHG emissions could be avoided by substituting a fossil fuel with wood fuel. Forest fertilization is an attractive option for increasing energy security and reducing net GHG emission. In addition to carbon dioxide the emissions of methane and nitrous oxides may be important factors in GHG balance of biofuels. Forest management rules, best practices for nitrogen fertilizer use and development of second generation technologies use reduce these emissions. Soils have an important role in the global budget of greenhouse gases. However, the effects of biomass production on soil properties are entirely site and practice-specific and little is known about long-term impact. Soil biological systems are resilient and they do not show any lasting impacts due to intensive site management activities. Land management practices can change dramatically the characteristic and gas exchange of an ecosystem. GHG benefits from biomass feedstock use are in some cases significantly lower if the effects of direct¹ or indirect (ILUC²) land use change are taken into account. LUC and ILUC can impact the GHG emission by affecting carbon balance in soil and thus ecosystem. To understand carbon fluxes in an ecosystem large ecosystem units and time scale are critical. Mitigation measures of the impact of land use change on greenhouse gas emissions include the use of residues as feedstock, cultivation of feedstock on abandoned arable land and use of feedstock by-products as substitutes for primary crops as animal feed. Cropping management is the other key factor in estimating GHG emissions associated with LUC and there is significant opportunity to reduce the potential carbon debt and GHG emissions through improved crop and soil management practices, including crop choice, intensity of inputs, harvesting strategy, and tilling practices. Also a system with whole trees harvesting with nutrient compensation is closely to being greenhouse-gas-neutral. Biochar applied to the soil offers a direct method for sequestrating C and generating bioenergy. However, the most recent studies showing that emissions resulting from ILUC are significant have not been systematically compared and summarized and current practices for estimating the effects of ILUC suffer from large uncertainties. Therefore, it seems to be delicate to include the ILUC effects in the GHG emission balance at a country level. The land availability is an important factor in determining bioenergy sustainability. However, even though food and biofuel/biomass can compete for land, this is not inevitably the case. The pattern of completion competition will e.g. depend on whether food security policies are in place. Moreover, the great potential for uncomplicated biomass production lies in using residues and organic waste, introduction of second generation biofuels which are more efficient in use of land and bioresources as well as restoration of degraded and wasted areas. Agroforestry has high potential for simultaneously satisfying many important objectives at ecosystems, economic and social levels. For example, as a very flexible, but low-input system, alley cropping can supply biomass resources in a sustainable way and at the same time provide ecological benefits in Central Europe. A farming system that integrates woody crops with conventional agricultural crops/pasture can more fully utilize the basic resources of water, carbon dioxide, nutrients, and sunlight, thereby producing greater total biomass yield. Overall, whether food prices will rise in parallel to an increase in biofuel demand will depend, more on trade barriers, subsidies, policies and limitations of marketing infrastructure than on lack of physical capacity. There are plant species that provide not only biofuel resources but also has the potential to sequestrate carbon to soil. For example, reed canary grass (RCG, Phalaris arundinacea L.) indicates the potential as a carbon sink. Harvest residues are increasingly utilized to produce energy. Sweden developed a series of recommendations and good-practice guidelines (GPG) for whole tree harvesting practices. Water has a multifarious relationship to energy. Biofuel production will have a relatively minor impact on the global water use. It is critically important to use low-quality water sources and to select the crops and countries that (under current production circumstances) produce bioenergy feedstock in the water-efficient way. However, local and regional impacts of biofuel production could be substantial. Knowledge of watershed characteristics, local hydrology and natural peak flow patterns coupled with site planning, location choice and species choice, are all factors that will determine whether or not this relationship is sustainable. For example, bioethanol's water requirements can range from 5 to 2138 L per liter of ethanol depending on regional irrigation practices. Moreover, sugarcane in Brazil evaporates 2,200 liters for every liter of ethanol, but this demand is met by abundant rainfall. Biomass production can have both positive and negative effects on species diversity. However, woodfuel production systems as well as agroforestry have the potential to increase biodiversity. A regional energy planning could have an important role to play in order to achieve energy-efficient and cost-efficient energy systems. Closing the loop through the optimization of all resources is essential to minimize conflicts in resource requirements as a result of increased biomass feedstock production. A systems approach where the agricultural, forestry, energy, and environmental sectors are considered as components of a single system, and environmental liabilities are used as recoverable resources for biomass feedstock production has the potential to significantly improve the economic, social, and environmental sustainability of biofuels. The LCA (life cycle analysis) approach takes into account all the input and output flows occurring in biomass production systems. The source of biomass has a big impact on LCA outcomes and there is a broad agreement in the scientific community that LCA is one of the best methodologies for the GHG balance calculation of biomass systems. Overall, maximizing benefits of bioenergy while minimizing negative impacts is most likely to occur in the presence of adequate knowledge and frameworks, such as for example certification systems, policy and guidelines. Criteria for achieving sustainability and best land use practices when producing biomass for energy must be established and adopted. ___________ ¹ Direct land-use change occurs when feedstock for biofuels purposes (e.g. soybean for biodiesel) displace a prior land-use (e.g. forest), thereby generating possible changes in the carbon stock of that land. ² Indirect land-use change (ILUC) occurs when pressure on agriculture due to the displacement of previous activity or use of the biomass induces land-use changes on other lands.