With the ever-rising concern of global warming, carbon capture is gaining the reputation of one of the most challenging fields of research. A very promising technology to capture CO2 is oxy-combustion. Oxy-combustion offers several advantages over conventional combustion technologies, such as flue–gas volume reduction, high combustion efficiency, low fuel consumption, and significant reduction in NOx emissions. Liquid fuel is available and it is the most widely used source of energy in the world. Easy handling and transporting, less storage volume and higher flame temperature are some of the features of liquid fuel which give it an upper hand over other sources. In this study, an experimental work on oxygen enriched combustion of ethanol in a vertical reactor by Lacas et al. (2005, “Experimental Study of Air Dilution in Oxy-Liquid Fuel Flames,” Proc. Combust. Inst., 30(2), pp. 2037–2045) has been modeled numerically. Nonpremixed model using probability density function (PDF) has been incorporated to simulate the combustion process of ethanol droplets. Predicted combustion characteristics are found to be in good compliance with the experimental data. In addition to this, effects of dilution of carbon dioxide in oxygen on the flame properties have also been presented. Combustion of ethanol in oxygen–carbon dioxide environment has been compared with that of the conventional air environment.