The Swedish district heating sector has achieved a strong position with a market share of 60% during 2008 in the heat market for buildings in the residential and service sectors. This position has been reached during the last 30 years without major use of combined heat and power (CHP) plants. The district heat has instead been generated from a basket of waste incineration, industrial surplus heat, biomass, and some fossil CHP. But during the recent years, the fossil CHP has been replaced by biomass CHP. The specific carbon dioxide emissions are now more than 80% lower than in other European cities and towns using natural gas and fuel oil to heat buildings. This paper gives a short overview of the development of the Swedish district heating sector with respect to market position, the CHP situation, the carbon dioxide emissions, and the additional social cost for district heating.