The growing demand for bioenergy in Sweden has drawn attention to the potential of forest thinning as bioenergy feedstock. There are, however, concerns regarding the cost effectiveness and environmental challenges of harvesting and processing forest thinnings into bioenergy. It is against this background that cost, energy and carbon balances were analysed to evaluate some of the economic and environmental sustainability issues of forest thinning based bioenergy systems. Primary data was collected from two thinning operations in two forest plots comprising spruce and birch stands. One operation involved the use of the conventional two machines (one separate machine for cutting or felling and another for forwarding felled trees) for the thinning work. The second operation involved a harwarder, which combines tree felling/cutting and forwarding in one unit machine. The results showed that forest thinnings provide a potential resource for the sustainable production of bioenergy. (C) 2011 Elsevier Ltd. All rights reserved.