Coal liquefaction is a process in which coal is converted into liquid fuels or petrochemicals. There are several processes used to accomplish this task, the two most common being the "indirect route" and the "direct route".
The indirect route is composed of 2 steps: First, coal is gasified with steam and oxygen to produce a synthesis gas (syngas), which is then cleaned to rid of dust, tar, and acid gases. The second step reacts the synthesis gas with a catalyst in the Fischer-Tropsch process, which converts the syngas into a range of hydrocarbon fuels such as gasoline, diesel and methanol.
In the direct route, coal is pulverized and reacted with a catalyst, then hydrogen is added under high pressures and temperatures in the presence of a solvent to produce a raw liquid fuel. This raw fuel requires refining in order to yield acceptable transportation fuels.
Check out the video below for a visual explanation of the liquefaction process. This video was created by the Biofuels Academy:
Countries with abundant coal resources (such as the US and China) benefit from this conversion, as it can help reduce reliance on imported liquid fuels. It also offers the potential to economically produce hydrogen.
Carbon capture and storage can be integrated into the process, and biomass can also be incorporated to further reduce the CO2 footprint while taking advantage of the economies of scale associated with coal.