In this article, it was investigated whether potentially low-cost CO2 capture from SOFC systems could enhance the penetration of SOFC in the energy market in a highly carbon-constrained society in the mid-term future (up to year 2025). The application of 5 MWe SOFC systems for industrial combined heat and power (CHP) generation was considered. For CO2 capture, oxyfuel combustion of anode off-gas using commercially available technologies was selected. Gas turbine (GT-) CHP plant was considered to be the reference case. Technical results showed that despite the energy penalties due to CO2 capture and compression, net electrical and heat efficiencies were nearly identical with or without CO2 capture. This was due to higher heat recovery efficiency by separating SOFC off-gas streams for CO2 capture. However, CO2 capture significantly increased the required SOFC and heat exchanger areas. Economic results showed that for above 40-50 $ t (1) CO2 price, SOFC-CHP systems were more economical when equipped with CO2 capture. CO2 capture also enabled SOFC-CHP to compete with GT-CHP at higher cell stack production costs. At zero CO2 price, cell stack production cost had to be as low as 140 kW (1) for SOFC-CHP to outperform GT-CHP. At 100 $ t (1) CO2 price, the cell stack production cost requirement raised to 350 $ kW (1). With CO2 capture, SOFC-CHP still outperformed GT-CHP at a significantly higher cell stack production cost above 900 $ kW (1). (C) 2010 Elsevier Ltd. All rights reserved.