This study analyses the use of liquid, solid and gaseous biomass for power generation in Germany with respect to the Renewable Energy Sources Act (EEG), a significant policy instrument for promoting electricity generation based on renewable energy sources. The aim is the identification of bioenergy conversion pathways that have a low environmental imapct and are cost-effective. To achieve this objective several research steps were undertaken, including a life-cycle analysis (LCA), economic analysis and the determination of the CO2 abatement costs based on the results of the environmental and economic assessment. The LCA of the bioenergy conversion pathways is conducted by considering different scenarios (e.g. varying the type and ratio of resources used, the plant sizes etc.). The impact assessment incorporates various significant environmental impacts, such as greenhouse gas (GHG) emissions, acidification, and eutrophication. Currently, most of the available studies on this matter mainly take GHG emissions (expressed as CO2-equivalents) into consideration. Hence, the authors will show and discuss, how e.g. a simplification of the environmental assessment by considering only the greenhouse gases or applying different calculation methodologies (i.e. allocation rules between electricity and heat produced) can affect the results. Following the LCA the chosen bioenergy conversion pathways are examined under economic aspects considering the electricity production costs including capital, operating and feedstock costs compared to the compensation payment within the EEG. Evaluations are based on the annuity method. Finally, conclusions and recommendations on the a) most environmentally friendly options among the considered bioenergy conversion pathways b) most cost-effective bionergy conversion pathways c) trade-off between environmental and economic aspects are given.