To explore the feasibility of converting hot flue gas into valuable syngas through char gasification process, Aspen Plus is applied to evaluate the performance of the integrated system including oxy-combustion, pyrolysis, gasification, and flue gas recirculation. The impact of feedstock type (reed straw and municipal solid waste (MSW)), feeding rate (0.1–1 t/h), and flue gas recycle ratio (FGR) (10%–30%) is investigated. The economic analysis of the integrated system is also performed. The results indicate that higher oxygen consumption is required for biomass gasification to reach the same temperature as MSW gasification. The gasification temperature is 750 °C–950 °C under 10%–30% FGR. The CO + H2 content in syngas from biomass gasification is slightly higher than that from MSW gasification. For the integrated system, more natural gas (NG) can be saved and more fossil CO2 can be reduced under biomass gasification. When the feedstock input is 1 t/h, the fossil CO2 emission can be reduced by 70% when taking biomass, the CO2 reduction is double of that when taking MSW. The total OPEX cost can be 26% saved by biomass and 62% saved by MSW due to the government subsidy. If CO2 tax is considered, the advantage of biomass for saving OPEX cost will be more obvious.