It is assumed that the biomass is one of the basic non-conventional energy sources in Poland. Among the cereals cultivated in Poland grain oats appears to be the most useful to be used for energy purposes, as it is less important for consumption and feed, cultivation technology is well known to farmers and the energy value of approx. 17 MJ kg^-1. The aim of the study was to evaluate the cost-effectiveness and environmental impact of the use of oats for direct combustion, as compared with conventional fuel ie. the fine coal. In the economic part a simplified calculation of the cost of oats production was carried out and next it was compared with the cost of the purchase of oats and fine coal. The impact of oats to the environment was also analyzed and the natural emission of gases and dust during grain combustion. The results were compared with the impact on the environment taking into account the production of fine coal mining, transport and combustion of the fuel. It was found that the use of oats for energy purposes is cost-effective, especially if the grain is produced on their own farm using low-cost technology. It also provides environmental benefits, as it allows to reduce the consumption of fossil fuels and reduce the emission of noxious gases and dust into the atmosphere