Application of municipal residues, e.g. wastewater or sewage sludge, to Short Rotation Coppice (SRC) is among the most attractive methods for attaining environmental and energy goals set for Europe. At current woodchip prices in Sweden, the gross margin for SRC cultivation is positive only if biomass production is >9 t DM/ha yr. The gross profit margin increases (by 39 and 199 (sic)/GJ, respectively) if sewage sludge and wastewater are applied to SRC. Application of residues to SRC has proved to be an acceptable alternative treatment method, and the farmer's profit can be markedly increased if compensation is paid for waste treatment. If all available sludge and wastewater were applied to SRC plantations, they could be grown on large agricultural areas in Europe, and c. 6000 PJ of renewable energy could be produced annually. However, a more economical landuse strategy, e.g. the use of more P-rich residues, appears more rational, and is biologically justifiable. (C) 2010 Elsevier Ltd. All rights reserved.