Liquefied Coal May Become an Economically Viable Fuel Option


Coal is a combustible sedimentary rock that has become the world’s most used energy source. Because it is so abundant and therefore cheap, much research has been done to see what other kinds of uses it can have other than direct burning for electricity production. The liquefaction of coal is one concept that is being given new life due to higher petroleum prices. Currently it is cost-prohibitive and environmentally unfriendly. But according to a new study from the Massachusetts Institute of Technology (MIT), as early as 2015 and without a solid climate policy, coal-to-liquid (CTL) fuel may be economically viable in the US and China.

CTL fuels have been in existence since the 1920s, and were used extensively by Germany in the 1940s. At the time, it produced about 90 percent of their national fuel needs. Then Middle Eastern oil became dirt cheap and CTL technology was largely abandoned. The only country that still uses it in a significant way is South Africa where it covers about 30 percent of their fuel needs.

The production of liquefied coal has a large carbon footprint, much larger than that of petroleum fuel production. One method of production is carbonization where the coal is coked at temperatures up to 1,380 F to produce coal tars rich in hydrocarbons. The coal tar is then further refined into fuels. The process produces a large amount of carbon dioxide emissions. If done without carbon capture and storage technologies, the life-cycle carbon footprint is about double that of crude oil.

The new MIT study examined different future scenarios with variables such as potential climate policies, the availability of biofuels, and other economic and regulatory factors. They found that in 2015, CTL technology will be economically viable in coal-rich countries like the US and China. In other regions, it could be viable by 2020 or 2025. In this scenario, carbon capture technology would not be used because it would raise the costs too much. In this scenario, liquefied coal would account for a third of the world’s liquid fuel supply by 2050.

The study notes that the viability of CTL will by vary greatly on whether or not certain regions adopt prohibitive climate policies. If lower-carbon fuels are available, CTL would not be considered as an option. Liquefied coal may only be available in developing nations with lax environmental rules, and where low-carbon alternatives are not available.

One of the study’s authors, John Reilly, stated, “Various climate proposals have very different impacts on the allowances of regional CO2 emissions, which in turn have quite distinct implications on the prospects for CTL conversion. If climate policies are enforced, world demand for petroleum products would decrease, the price of crude oil would fall, and coal-to-liquid fuels would be much less competitive.”

Article by David A Gabel, appearing courtesy Environmental News Network.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.


  1. Yeah right !

    Just as we are thinking about solving the climate/energy equation by ditching coal, some are willing to put it in our car tanks…

    Splendid ! Shouldn’t we concentrate on REAL alternatives instead ? Ones that actually cut our emissions and pollutions.

    It’s not as if the climate was getting weirder and weirder and it is not as if coal cost half a trillion to the USA each year in externalities

    What about peak coal ?

    Sorry for the virulent tone this comment bears, but seeing how some think about relying to some 1920’s dirty tech when we need 2020’s clean tech, that just gets me mad…

  2. My Question is : What is the relative ‘Input vs Output’ of the process,, The article compares the useage to petrolium, but how does it compare to ‘King

    Corn Ethanol’ production,, we all know it takes about 60 – 70% fossil energy

    to produce one gallon of Corn Ethanol, How does ‘Coal Fuel’ Compare,???

  3. Use the natural gas resources first. Maybe the more green technologies will be mature before they are used up. There are also biogas and methane hydrates. Coal should be the last cheap resource if we must use it.

  4. Sweet! South Africa produces this for $40-$45 a barrel. China’s cranking things up and so is India. The fossil alternatives just keeping beating the pants off the energy lite stuff. Thank God the earth acts like a battery for all that solar power.