Abstract In this study, a novel single-step synthesis of dimethyl ether (DME) based on CO2-enhanced biomass gasification was proposed and simulated using ASPEN Plus™ modelling. The exergetic and environmental evaluation was performed in comparison with a conventional system. It was found that the fuel energy efficiency, plant energy efficiency and plant exergetic efficiency of the CO2-enhanced system were better than those of the conventional system. The novel process produced 0.59 kg of DME per kg of gumwood with an overall plant energy efficiency of 65%, which were 28% and 5% higher than those of conventional systems, respectively. The overall exergetic efficiency of the CO2-enhanced system was also 7% higher. Exergetic analysis of each individual process unit in both the CO2-enhanced system and conventional systems showed that the largest loss occurred at gasification unit. However, the use of CO2 as gasifying agent resulted in a reduced loss at gasifier by 15%, indicating another advantage of the proposed system. In addition, the life cycle assessment (LCA) analysis showed that the use of CO2 as gasifying agent could also result in less environmental impacts compared with conventional systems, which subsequently made the CO2-enhanced system a promising option for a more environmental friendly synthesis of bio-DME.