The opportunity for commercial-scale bioenergy production is assessed within the context of the commercial risk elements underlying investment in bioenergy technology. A case study is described involving the Production of methane from forest residues and MSW available in the central North Island of New Zealand. The production scheme utilised combines steam explosion pretreatment followed by two-phase anaerobic digestion of the cellulosic materials. Factors affecting the commercial deployment of the project are summarised and the economic and technical aspects reviewed with regard to the potential development of bioenergy in New Zealand. Copyright (C) 1996 Elsevier Science Ltd.