This paper considers the climate, health and acidification impacts associated with household-level heating technologies; the policy-based incentives that current emission limits might create for switching between these technologies; and the societal costs that would arise from the externalities associated with the emissions. The data and selection of appliances are applicable to Finland, but the approach can be used to analyse also other countries with similar environmental policies. The results indicate that none of the assessed technologies outperforms the others in every impact category, and that trade-offs need to be made between the impacts. Two perspectives are used to compare these trade-offs. From a policy point of view, a switch from light oil to any of the studied biomass-based appliances would help to achieve national emission limits for CO2 and SO2. However, such a switch could potentially increase the externality costs to the society due to increased population exposure to primary PM2.5. Based on this, the results suggest that the present emission reduction policies create incentives that can possibly direct decisions toward sub-optimal technology choices. (C) 2014 Elsevier Ltd. All rights reserved.