The efficient use of CO2-neutral biofuels offers a potential to reduce CO2 emissions by reducing fossil fuel consumption. By combining biofuel conversion with carbon dioxide capture and sequestration (CCS), energy utilisation with a negative CO2 balance can be achieved. The present paper studies the feasibility of combining CCS with different systems for co-production of biomass-based transportation fuels, power, and heat. The systems studied include both conventional and emerging technologies for recovery of chemicals and energy from black liquor, a residual of the kraft pulping process. A new method is introduced for economic evaluation of investments in energy facilities. The method considers economic credits for both energy products and CO2 reductions, thus including the potential economic benefits of emissions trading on a future market for trading of CO2 emissions quota. The paper estimates the prices of CO2 emissions quota that justify the extra investments required for more advanced systems with CCS. The potential of the alternative systems to reduce CO2 emissions in Sweden is assessed. CCS in biomass-based energy systems is identified as a CO2 reduction option of particular interest for regions with low emissions from the power sector.