Ferric oxide containing waterworks sludge can be used to reduce formation of hydrogen sulfide during anaerobic digestion. The ferric compound is reduced biochemically in the digester and forms insoluble pyrite in digester sludge. Often virgin ferric chloride is used to solve the hydrogen sulfide problem. Since 2013, Sydvatten AB has supplied a growing number of digestion plants in Sweden with ferric containing dewatered waterworks sludge from the drinking water treatment plant Ringsjöverket to limit the formation of hydrogen sulfide. At the waterworks, ferric chloride is added to enhance coagulation of organic matter from the source water. The sludge formed in this process is dewatered and landfilled, but also recycled in the biogas production in order to reduce the hydrogen sulfide concentration. In this study, the use of sludge, for hydrogen sulfide removal in digesters, was technically and economically evaluated from cases studies from 13 full-scale digesters in Sweden. Compared with use of fresh ferric chloride, the operational costs are reduced up to 50 % by using sludge. The quality of the sludge is high and its content on metals is low or very low, especially when compared with requirements from different certification standards on biosolid reuse applied in Sweden. An addition of waterworks sludge containing iron to a digester for removal of dissolved hydrogen sulfide is a technically and economic good alternative when producing biogas. It is also one step closer to a circular economy, when replacing use of virgin chemicals with the by-product waterworks sludge which saves energy, material and reduces the carbon foot-print of the waterworks.