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This experimental research was purposed to investigate the production and energy potential of solid recovered fuel (SRF), obtained by extraction of prohibited materials, shredding and drying, from refuse-derived fuel (RDF) to use as an alternative fuel in the cement industry of Lithuania. The characteristics of the obtained RDF by separating the biological fraction from the mainstream of municipal solid waste (MSW) have been determined and compared with the criteria set by developing countries. According to EN15359, currently available RDF can’t be called SRF and used as an alternative fuel in a cement kiln. The SRF production line by adding six additional technological units to the existing MBT line was developed. The calculation of the SRF production line was carried out and made 1.89 t/h. At the end of the production process of SRF from RDF, the moisture content (MC) of the obtained SRF decreased by 90 %. After the drying stage, the volume of SRF decreased by 19 %. The process of preparing SRF allowed increasing the net calorific value (NCV) by 22.1 % to 28.2 MJ/kg by reducing the MC. The obtained SRF had a high NCV, low MC, permissible Cl and Hg contents. Two scenarios of waste generation in the Alytus region until 2030 have been developed. Based on the waste generation scenarios results, the proposed SRF production line will provide 12 % of the additional fuel for clinker firing during the analyzed period. A cost analysis to assess the economic and environmental savings from the use of SRF was performed. The results showed that adding 12 % of SRF as a replacement fuel, equal to 1.86 t/h, to the coal used in the cement kiln would save 860 USD/h in coal costs. At the same time, it will emit 5.96 t/h of CO2 into the atmosphere, and the net savings will amount to 1,131 USD/h. [ABSTRACT FROM AUTHOR]