Your understanding is correct, fly ash can be used as a substitute for portland cement. It's apparently chemically similar to how the Romans used to use volcanic ash in their concrete mixes. A lot of cement sold these days is a mixture of fly ash and portland cement.

My impression is that fly ash involves the production of more CO2 than burning coal to produce an equivalent amount of portland cement, but it's worth it when you're burning coal anyway and fly ash is basically free as a byproduct. So in practice it essentially offsets CO2 emissions from burning coal, but only partially.

That's just the impression I've gotten though, I don't have any numbers for any of it.