Coal is a fossil fuel formed in ecosystems where plant remains were preserved by water and mud from oxidization and biodegradation, thus sequestering atmospheric carbon. Coal is a readily combustible black or brownish-black rock. It is a sedimentary rock, but the harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure. It is composed primarily of carbon and hydrogen along with small quantities of other elements, notably sulfur. Coal is extracted from the ground by coal mining, either underground mining or open pit mining (surface mining).

Coal is the largest source of fuel for the generation of electricity world-wide, as well as the largest world-wide source of carbon dioxide emissions. Carbon dioxide is a greenhouse gas and these emissions contribute to climate change and global warming. In terms of carbon dioxide emissions, coal is slightly ahead of petroleum and about double that of natural gas.

Coal gasification can be used to produce syngas, a mixture of carbon monoxide (CO) and hydrogen (H2) gas. This syngas can then be converted into transportation fuels like gasoline and diesel through the Fischer-Tropsch process. Currently, this technology is being used by the Sasol chemical company of South Africa to make gasoline from coal and natural gas. Alternatively, the hydrogen obtained from gasification can be used for various purposes such as powering a hydrogen economy, making ammonia, or upgrading fossil fuels.

During gasification, the coal is mixed with oxygen and steam (water vapor) while also being heated and pressurized. During the reaction, oxygen and water molecules oxidize the coal into carbon monoxide (CO) while also releasing hydrogen (H2) gas. This process has been conducted in both underground coal mines and in coal refineries.

If the refiner wants to produce gasoline, the syngas is collected at this state and routed into a Fischer-Tropsch reaction. If hydrogen is the desired end-product, however, the syngas is fed into the water gas shift reaction where more hydrogen is liberated.

High prices of oil and natural gas are leading to increased interest in "BTU Conversion" technologies such as gasification, methanation and liquefaction. The Synthetic Fuels Corporation was a U.S. government-funded corporation established in 1980 to create a market for alternatives to imported fossil fuels (such as coal gasification). The corporation was discontinued in 1985.

In the past, coal was converted to make coal gas, which was piped to customers to burn for illumination, heating, and cooking. At present, the safer natural gas is used instead.

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