On WWTP Ljubljana the main by-product of municipal wastewater treatment is the sewage sludge. It contains a high share of organic matter and can therefore be, after drying, utilized as an alternative solid fuel in large combustion plants. In the range of preformed physico-chemical tests of pellets, information was obtained about the elemental composition of biomass (macro and micro), its calorific value, volatile matter and ash content as well as behaviour at the repeated oxidative and reductive conditions at combustion (thermogravimetry supported by QMS). By measuring with TGA during programmed combustion of the pellets in an inert (argon) and oxydative (argon-oxygen) atmosphere, the mass balance of the sample was monitored, precisely the amount of the gas phase. QMS analysis was performed to determine which gaseous components had been formed. DTA measurements gave us an information on the heat balance at each stage of thermal decomposition of sewage sludge. An evaluation of environmental impact is complemented by a practical experience of the thermal utilization of this kind of waste-by co-incineration process in a cement factory.