Coproduction of district heat and electricity or biomotor fuels

► The strengthening of environmental taxation reduces the dependence on fossil fuels in district heating systems. ► Increases in environmental taxation and the crude oil price do not necessarily influence the production cost of district heat. ► Biomotor fuel production in a district heating system is typically not cost-efficient. ► A carbon tax on fossil CO2 emissions based on social cost damage will increase the competitiveness of biomass-based CHP plants.