In this study a process-based growth model for even-aged Norway Spruce (Picea abies [L.] Karst.) is coupled with economics and optimization to analyze optimal management and cost of carbon sequestration. We extend earlier literature by including detailed timber quality features and optimized thinning. Our results show that tree diameter has a major role in defining the optimal timing of harvests especially with higher interest rates. Optimal management with carbon sequestration mainly postpones thinnings, lengthens rotations, and increases sawlog yield. Economic cost of carbon storage is presented for two different sites and two different interest rates. These costs are compared to CO2 abatement costs in other sectors on a national level. This study suggests it would be economically optimal to use carbon sequestration in order to fulfil national commitment to the EU, i.e. to reduce greenhouse gas emissions by 2020.