This paper presents the application of a comprehensive approach to the design of small scale sustainable distributed generation systems with special focus on energy recovery from paper production process sludge. The methodology integrates a detailed fluid-dynamic analysis tool with preliminary experimental analysis on a laboratory scale to guide the design of a prototype bubbling fluidized bed gasifier in the 85 kW power range fitting with small and medium size paper production industries. Preliminary tests show stable operation even for this rather small power scale, and deviation from chemical equilibrium concentration in agreement with literature available data. Energy content in the sludge may be recovered along with a significant reduction of residual volume and mass. The concept may then be used to increase the overall sustainability of paper production. (C) 2011 Elsevier Ltd. All rights reserved.