Based on the KAMa reference pulp and paper mill, polygeneration systems with a black liquorgasifier are studied. The systems introduce black liquor gasifier to replace a recovery boiler inpulp mills to produce both methanol and electricity while capturing CO2 by means of oxygen-fuelcombustion and Selexol pre-combustion. The systems are simulated and compared with or withoutCO2 capture integrated with black liquor gasification. The productions of methanol and electricityfrom the black liquor are compared with that of the reference system, which is defined as arecovery boiler based power generation system. Thermodynamic and economic performanceincluding efficiency and costs are compared between the polygeneration systems and the referencesystem. Compared with the reference system the polygeneration system produces additional73.5MW methanol while reducing electricity of 11.2MW with the investment incremental of 8.6%.The penalty due to CO2 capture and compression is 0.46 MJ electricity/kg CO2 avoided foroxygen-fuel combustion method (86% carbon capture). This penalty is much lower than that ofthe CO2 penalty in coal power plant which is in the range of about 0.91 (IGCC, 91.7% CO2capture) to 1.56 (steam power, 91.7% CO2 capture) MJ electricity/kg CO2. However, due to thelarge steam demand and methanol production, the CO2 penalty can reach 1.33 MJ Methanol /kgCO2 avoided in the Selexol capture system (73% carbon capture). The incremental cost due toCO2 capture and storage is 22.9 $/tonne CO2 for oxyfuel combustion and 48.6 $/tonne CO2 forSelexol capture. For the large demand of steam in the mill, much syngas is used to meet the steamdememd, which limits the production of methanol, especially in the case of Selexol capture ofCO2.