A method of operating an oxycombustion circulating fluidized bed (CFB) boiler that includes a furnace having a grid at its bottom section, a solid material separator connected to an upper part of the furnace, and an external solid material handling system. Oxidant gas is introduced into the CFB boiler through the grid as fluidizing gas, the fluidizing gas including recirculating flue gas. Fuel material is introduced into the circulating fluidized bed. A sulfur reducing agent including CaCO3 is introduced into the circulating fluidized bed. Solid material is circulated out of the furnace and provides an external circulation of solid material via the external solid material handling system. The solid material is fluidized in the external solid material handling system by introducing a fluidizing medium including recirculating flue gas into the handling system. A predetermined amount of steam is introduced into the handling system as a component of the fluidizing medium.