This paper presents an assessment of the surplus grass production in the Region of Southern Denmark, and the perspectives of utilizing it in local biogas production. Grass production represents a significant role in the Danish agricultural sector. However, statistical data show an excess production of averagely 12% in the period 2006–2012. Based on spatial analyses and statistical data, the geographical distribution of grass production and consumption was estimated and mapped for the Region of Southern Denmark. An excess production of grass was estimated for several of the municipalities in the Region of Southern Denmark, but the excess production was found to be quite sensitive to the management practice of the grass fields and the productivity of the grass. The yields of excess grass estimated in the sensitive and conservative scenario were found to be sufficient to serve a sole co-substrate in 2–8 biogas plants using animal manure as primary feedstock. The yields in the intensive scenario were assessed to be sufficient to serve a sole co-substrate in 8–16 biogas plants. Alternatively, at least 31% of the regionally produced maize which is exported to the biogas sector could annually be substituted by methane produced from the production of excess grass. The intensive scenario was estimated to have significantly higher grass yields than the sensitive and conservative scenario. The environmental impacts of intensified agricultural management should, however, be assessed carefully in order to ensure that the ecosystems are not increasingly being burdened. The potential of utilizing residual grass for energy production in the region or as an alternative to the maize exported to Northern Germany, was concluded to seem as a promising possibility for a sustainable development of the regional biogas sector. Furthermore, it could provide incentives for establishing new biogas plants in the region and thereby increase the share of manure being digested anaerobically, which could help extrapolate the environmental and climate related benefits documented for the use of digested animal manure as fertilizer on agricultural land.