PURPOSE: A sludge carbonization system and a byproduct fuel extraction method using the same are provided to efficiently use energy for drying and carbonization of sludge by indirectly heating sludge by flowing heated air passed through a carbonization process to a first drying part. CONSTITUTION: A sludge carbonization system includes a input hopper(100), a first drying part(200), a second drying part(300), a carbonization part(400), a discharge hopper(500), and a heat supply part(600). A first drying part is connected to the input hopper by a first transfer pipe(110), receives sludge from the input hopper, and has a first transfer flow path(210) performing a first drying while transferring the sludge from one end to the other end. A second drying part is connected to the first drying part by a second transfer pipe(230), receives sludge from the first drying part, and has a second transfer flow path(310) performing a second drying while transferring the sludge from one end to the other end. A carbonization part includes a carbonization flow path(410) and a heating flow path(420). A carbonization flow path is connected to the second drying part by a third transfer pipe(330), receives sludge from the second drying part, and forms a sludge carbonization substance by carbonizing while transferring from one end to the other end. Heated air flows in a heating flow path installed in the outer circumference surface of the carbonization flow path in order to heat sludge in an anoxic condition. A discharge hopper receives a sludge carbonization substance by a discharge pipe connected to the carbonization part. A heated air supply part supplies heated air to the second transfer flow path of the second drying part and the heating flow path of the carbonization part. [Reference numerals] (AA) Exhaust to the air