Abstract A novel approach, combining electrolysis and oxygen-blown entrained flow gasification enables high carbon efficiency for producing sustainable Fischer–Tropsch fuels. This Power-and-Biomass-to-Liquid process combines the concepts of using biomass as the carbon and energy source (Biomass-to-Liquid) and hydrogen as an energy carrier supplied from carbon-neutral renewable energies (Power-to-Liquid). A highly integrated Biomass-to-Liquid process is modeled in detail using Aspen Plus®. To enhance process performance, integrating green hydrogen and oxygen from water electrolysis is modeled and the use of polymer electrolyte membrane and solid oxide electrolysis at elevated temperature is compared. The energy efficiency of a conventional Biomass-to-Liquid process with advanced heat and material integration is about 46%, while overall carbon efficiency is about 41%. By adding hydrogen from electrolysis, the product yield is increased by a factor of 1.7–2.4. The improvement in fuel production comes at the price of a hydrogen demand in the range of 0.19–0.24 tH2/tfuel. For 200 MWth biomass input, this results in electrolyzer sizes between 120–320 MWel, depending on the process configuration and the electrolysis technology used. The detailed process models show the high potential for increasing carbon efficiency to up to 67%–97% by integrating renewable power into a Biomass-to-Liquid process.