The factors which made biomass commercially viable in the city of Vaxjo, Sweden (a 205 MW plant) and the social acceptability of biomass energy are examined. The results of the study show that a combination of monetary and social factors has helped to make biomass, commercially viable. Among the more important reasons include a supportive public, economic subsidies from the Swedish State, a large resource base, a collaborative city council, and a forward and innovative management at the utility owning the biomass district heating plant. The relevance of the results to biomass use in Europe is discussed. Copyright (C) 1996 Elsevier Science Ltd.