Cost-effective technologies are needed to reach the international greenhouse gas (GHG) reduction targets in many fields, including waste and biomass treatment. This work reports the effects of CO2 capture from a combustion flue gas and its use in a newly-patented, two-phase anaerobic digestion (TPAD) process, to improve energy recovery and to reduce CO2 emissions. A TPAD process, fed with urban wastewater sludge, was successfully established and maintained for several months at pilot scale. The TPAD process with injection of CO2 exhibits efficient biomass degradation (58% VSS reduction), increased VFA production during the acidogenic phase (leading to VFA concentration of 8.4 g/L) and high biomethane production (0.350 Sm-3/kgssv: 0.363 Sm-3/m(react)(3)d). Moreover, CO2 intake in the acid phase has a positive impact on the overall GHG balance associated to biomethane production, and suggests an improved solution for both emission reduction and biomass conversion into biomethane. (C) 2011 Elsevier Ltd. All rights reserved.