AbstractFeed in tariffs (FiTs) and renewable heat incentives (RHIs) are driving a rapid expansion in anaerobic digestion (AD) coupled with combined heat and power (CHP) plants in the UK. Farm models were combined with consequential life cycle assessment (CLCA) to assess the net environmental balance of representative biogas, biofuel and biomass scenarios on a large arable farm, capturing crop rotation and digestate nutrient cycling effects. All bioenergy options led to avoided fossil resource depletion. Global warming potential (GWP) balances ranged from −1732 kg CO2e Mg−1 dry matter (DM) for pig slurry AD feedstock after accounting for avoided slurry storage to +2251 kg CO2e Mg−1 DM for oilseed rape biodiesel feedstock after attributing indirect land use change (iLUC) to displaced food production. Maize monoculture for AD led to net GWP increases via iLUC, but optimized integration of maize into an arable rotation resulted in negligible food crop displacement and iLUC. However, even under best‐case assumptions such as full use of heat output from AD‐CHP, crop–biogas achieved low GWP reductions per hectare compared with Miscanthus heating pellets under default estimates of iLUC. Ecosystem services (ES) assessment highlighted soil and water quality risks for maize cultivation. All bioenergy crop options led to net increases in eutrophication after displaced food production was accounted for. The environmental balance of AD is sensitive to design and management factors such as digestate storage and application techniques, which are not well regulated in the UK. Currently, FiT payments are not dependent on compliance with sustainability criteria. We conclude that CLCA and ES effects should be integrated into sustainability criteria for FiTs and RHIs, to direct public money towards resource‐efficient renewable energy options that achieve genuine climate protection without degrading soil, air or water quality.