Woody biomass can be used in different ways to contribute to sustainable development. In this paper, we analyze biomass-based production of district heat, electricity, pellets and motor fuels. We calculate production cost and biomass use of products from standalone production and from different district heat production options, including only heat production and various co/polygeneration options. We optimize the different district heat production systems considering the value of co/polygenerated products, other than district heat, as equal to those produced in minimum-cost standalone plants. Also, we investigate how the scale of district heating systems influences the minimum-cost composition of production units and district heat production costs. We find that co/polygenerated district heat is more cost and fuel efficient than that from heat-only production. Also, coproduction of electricity is more efficient than of motor fuels except for dimethyl-ether production in large district heat production systems. However, the cost difference is minor between coproduction of dimethyl-ether or electricity in such systems. Integrated biopellet production increases the production of electricity or motor fuel and reduces the production cost. District heat production cost depends on fuel price, however, its dependence is reduced if district heat production system is cost-minimized and based on co/polygenerated units. Also, the optimal composition and cost of district heat production depend on the scale of the system. The demand for biopellets may limit the potential integrated production of such a product. (C) 2012 Elsevier Ltd. All rights reserved.