Climate mitigation requires emissions to peak then decline within two decades, but many mitigation models include 100 EJ or more of bioenergy, ignoring emissions from biomass oxidation. Treatment of bioenergy as 'low carbon' or carbon neutral often assumes fuels are agricultural or forestry residues that will decompose and emit CO2 if not burned for energy. However, for 'low carbon' assumptions about residues to be reasonable, two conditions must be met: biomass must genuinely be material left over from some other process; and cumulative net emissions, the additional CO2 emitted by burning biomass compared to its alternative fate, must be low or negligible in a timeframe meaningful for climate mitigation. This study assesses biomass use and net emissions from the US bioenergy and wood pellet manufacturing sectors. It defines the ratio of cumulative net emissions to combustion, manufacturing and transport emissions as the net emissions impact (NEI), and evaluates the NEI at year 10 and beyond for a variety of scenarios. The analysis indicates the US industrial bioenergy sector mostly burns black liquor and has an NEI of 20% at year 10, while the NEI for plants burning forest residues ranges from 41%–95%. Wood pellets have a NEI of 55%–79% at year 10, with net CO2 emissions of 14–20 tonnes for every tonne of pellets; by year 40, the NEI is 26%–54%. Net emissions may be ten times higher at year 40 if whole trees are harvested for feedstock. Projected global pellet use would generate around 1% of world bioenergy with cumulative net emissions of 2 Gt of CO2 by 2050. Using the NEI to weight biogenic CO2 for inclusion in carbon trading programs and to qualify bioenergy for renewable energy subsidies would reduce emissions more effectively than the current assumption of carbon neutrality.