The use of biomass as a potential energy source has both advantages and disadvantages. Biomass is a potential source of fuel energy that provides economic and environmental benefits such as less expensive and less energy intensive production, carbon sequestration and soil preservation. However, the main concern associated with biofuels is that land needed for food will be used for biofuel crops. One potential solution is the use of marginal lands which are not suited for food production. Marginal lands generally refer to the areas not only with low production, but also with limitations that make them unsuitable for agricultural practices and ecosystem functions. This can be due to various forms of land degradation such as pollution, surface exploitation of mineral resources, erosion, overexploitation and others. We used remotely sensed data, environmental data and field survey data to identify possible marginal lands in Serbia. All gathered data was transferred to GIS in order to create maps and database of potential marginal lands which could be used for biomass production.