Grassland is a beneficial landscape for numerous reasons including potential to sequester carbon in the soil. Cross compliance dictates that grassland should not be converted to arable land; this is particularly interesting in Ireland where 91\% of agricultural land is under grass. Biogas generated from grass and further upgraded to biomethane has been shown to offer a better energy balance than first-generation liquid biofuels indigenous to Europe. The essential question is whether the gaseous biofuel meets the EU sustainability criteria of 60\% greenhouse gas emission savings. The base-case scenario investigated included: utilization of electricity from the grid; over-sizing heated digestion tanks to hold digestate in the winter period; vehicular efficiency 82\% of that of a diesel vehicle; and no allowance for carbon sequestration. The analysis of the base case showed a reduction in emissions of 21.5\%. However by varying the system, using electricity from wind, improving digester configuration, and by using a vehicle optimized for gaseous fuel, a reduction of 54\% was evaluated. Furthermore allowing for 0.6 t carbon sequestration per hectare per annum the reduction increased to 75\%. (C) 2010 Society of Chemical Industry and John Wiley \& Sons, Ltd