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It can display images. It seems to even support HTML5 SVG. The HTML rendering engine (shr) was originally written as part of the Gnus project for exactly that

by fafner 12y ago

It can display images. It seems to even support HTML5 SVG. The HTML rendering engine (shr) was originally written as part of the Gnus project for exactly that task: To render HTML in RSS and email. The browser (eww) just adds http support via url.el and a user front end.