Co-combustion technology can be a gateway to sewage sludge valorization and net CO2 reduction. In this study, combustion characteristics of sewage sludge, Australian black coal, shiitake substrate, and their blends were analyzed via thermogravimetric analysis (TGA) coupled with Fourier transform infrared spectroscopy. The ignition temperature, burnout temperature, flammability index (C), and combustion characteristics index (S) of the fuels and their respective blends were estimated. Kinetic parameters were also estimated using the Coats-Redfern method. The results showed that the oxidation of the blends had two distinct stages. Synergistic effects existed for all the blends, with negative ones occurring at temperatures between 300 and 500 °C and positive ones during the char oxidation period. In the first oxidation stage, both C and S indexes increased with sludge addition to the coal. However, they decreased with sludge addition in the final oxidation stage. The catalytic effect of the sludge and the shiitake was pronounced in the final oxidation stage and it resulted in a decrease of activation energy. As for the pollutant emissions, the results showed that NOx and SO2 emissions decreased for 25 wt.% sludge addition to the coal. For the sludge-shiitake blends, NOx and SO2 emissions decreased with increasing shiitake addition. The single-pellet combustion results showed that ignition delay time reduced with increasing sludge/coal ratio but increased with increasing sludge/shiitake ratio. The volatile combustion duration decreased with the addition of sludge and total combustion time decreased sharply with increasing sludge ratio.