In Sweden, substantial volumes of municipal solid waste are currently incinerated in combined heat and power (CHP) plants, leading to the loss of potentially recyclable materials and the generation of fossil-based carbon dioxide emissions. In response, Tekniska verken in Linköping is establishing a material recovery facility (MRF) designed to extract plastics, paper, biowaste, as well as ferrous and non-ferrous metals from residual household waste for further material recycling and biogas production.This master’s thesis aimed to assess the climate implications of the MRF within the broader waste management system. A life cycle assessment (LCA) approach was applied to encompass both the energy recovery from waste incineration and the new material flows introduced by the facility. Recovered materials were modelled to displace the production of virgin materials, while biogas generated from biowaste was assumed to replace fossil fuels in heavy transport, and digestate was assumed to substitute mineral fertilizers. As the sorting process reduces the amount of waste available for incineration, imported industrial waste and biofuel are utilised as substitute fuels.Since the facility is not yet operational, key parameters such as sorting performance, recycling rates, market absorption of recovered materials, and the composition of substitute fuels remain uncertain. Scenario-based sensitivity analyses were therefore conducted. The results show that the MRF has the potential to reduce greenhouse gas emissions significantly, particularly under conditions of high material recovery efficiency and effective substitution of virgin materials. However, the climate benefits may be marginal if market outlets for recovered fractions are lacking, recovery rates are low, and industrial waste with high plastic content is used as replacement fuel.The study concludes that the climate performance of implementing a mechanical MRF is highly dependent on the degree of material separation, recycling efficiency, market conditions for secondary materials, and the properties of the substituted fuel. To realise the system’s climate mitigation potential, it is critical to achieve high recovery rates and strengthen the market demand for recycled materials.