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Abstract: As a non-Annex I Party to the United Nations Framework Convention on Climate Change and Kyoto Protocol signatory, the Republic of Serbia has committed to develop GHG (Greenhouse Gases) emission inventory and prepare comprehensive program of mitigation measures at national level. The paper presents results of 2000–2008 GHG emission inventory assembled for PDH (Public District Heating) sub-sector in accordance with revised IPCC (Intergovernmental Panel on Climate Change) Tier 1 methodology. Evaluation of proposed mitigation measures was performed based on 2012 and 2015 GHG emission projections, obtained for basic and four alternative scenarios, all characterized by the same energy demand but with different fuel mix used. The first alternative scenario addresses GHG emissions in case that solid fuel is substituted by natural gas. The second alternative scenario represents a sub-scenario of the first alternative scenario, with additional substitution of liquid fuel with locally available biomass. Third alternative scenario addresses emissions resulting from complete fuel switch from natural gas to liquid fuel oil, while the final alternative scenario considers the case when natural gas is the only energy resource used. GHG emission trends in the period until 2015, examined in case of previously mentioned basic and four alternative scenarios, point out to the positive impact of fuel switch on GHG emission reduction and pathways for future implementation of proposed mitigation measures. Results obtained clearly quantified assumption that fuel substitution by locally available biomass could solve environmental problems, overcome problems associated with high prices of imported fuels, improve energy supply security and increase local employment. [Copyright &y& Elsevier]