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The pulping industry generates vast amounts of bark residues and wastewater treatment sludges, which are combined and stored for varying periods in stacks, often in the open air, prior to utilization for energy via combustion. In order to optimize the storage strategy, the effects of incorporating sludge into bark on heating value and storage-related environmental impacts were investigated in laboratory and outdoor studies. Biological degradation activity was found to be higher in treatments containing 25% sludge (B75S25) and 50% sludge (B50S50) on a fresh mass basis, in comparison with pure bark (B100). Mean monthly dry mass loss was 2.1% (B100), 3.3% (B75S25), and 3.7% (B50S50) in the laboratory and 2.7%, 4.2%, and 4.8%, respectively, outdoors. Sludge addition was found to maintain degradation activity at low temperatures (+ 3°C). Co-storage of sludge and bark led to loss of energy, mainly due to increased loss of biomass and increased moisture content. Overall, biomass moisture content governed the heating value. Cumulative methane emissions over the storage period were higher from the sludge-containing treatments than from pure bark, but emissions of nitrogen-containing gases (N2O and NH3) were negligible throughout. Sludge addition roughly halved the cumulative chemical oxygen demand (COD) of leachate and minimized its concentration of phosphate-P. However, larger amounts of inorganic elements were released to the percolating water from the sludge-containing treatments. Overall, these results indicate that finding alternative uses for the sludge fraction would be beneficial.