World Coal Association
World Coal Association World Coal Association

Coal to Liquids

Converting coal to a liquid fuel (CTL) – a process referred to as coal liquefaction – allows coal to be utilised as an alternative to oil. There are two different methods for converting coal into liquid fuels:

  • Direct liquefaction works by dissolving the coal in a solvent at high temperature and pressure. This process is highly efficient, but the liquid products require further refining to achieve high grade fuel characteristics.
  • Indirect liquefaction gasifies the coal to form a ‘syngas’ (a mixture of hydrogen and carbon monoxide). The syngas is then condensed over a catalyst – the ‘Fischer-Tropsch’ process – to produce high quality, ultra-clean products.

An array of products can be made via these processes – ultra-clean petroleum and diesel, as well as synthetic waxes, lubricants, chemical feedstocks and alternative liquid fuels such as methanol and dimethyl ether (DME).

Where is it Used?

South Africa has been producing coal-derived fuels since 1955 and has the only commercial coal to liquids industry in operation today. Not only are CTL fuels used in cars and other vehicles, South African energy company Sasol’s CTL fuels also have approval to be utilised in commercial jets. Currently around 30% of the country’s gasoline and diesel needs are produced from indigenous coal. The total capacity of the South African CTL operations now stands in excess of 160,000bbl/d.

CTL is particularly suited to countries that rely heavily on oil imports and that have large domestic reserves of coal. There are a number of CTL projects around the world at various stages of development. Liquid fuels from coal can be delivered from an existing pump at a filling station via existing distribution infrastructure and used, without modification, in the current vehicle fleet.

CTL Outside of Transportation

Fuels produced from coal also have potential outside the transportation sector. In many developing countries, health impacts and local air quality concerns have driven calls for the use of clean cooking fuels. Replacing traditional biomass or solid fuels with liquefied petroleum gas (LPG) has been the focus of international aid programmes. LPG however, is an oil derivative – and is thus affected by the expense and price volatility of crude oil. Coal-derived dimethyl ether (DME) is receiving particular attention today as it is a product that holds out great promise as a domestic fuel. DME is non-carcinogenic and non-toxic to handle and generates less carbon monoxide and hydrocarbon air pollution than LPG. DME can also be used as an alternative to diesel for transport, as well as for on and off-grid power applications.

Benefits of CTL

Coal to liquids has a number of benefits:

  • Coal is affordable and available worldwide enabling countries to access domestic coal reserves – and a well-supplied international market - and decrease reliance on oil imports, improving energy security.
  • Coal liquids can be used for transport, cooking, stationary power generation, and in the chemicals industry.
  • Coal-derived fuels are sulphur-free, low in particulates, and low in nitrogen oxides.
  • Liquid fuels from coal provide ultra-clean cooking fuels, alleviating health risks from indoor air pollution

Increasing energy demand and rises in vehicle ownership means that it is important for countries to review the balance of their energy supply mix. 96% of all energy used in transport comes from petroleum; it therefore dominates the transport sector. CTL – along with gas-to-liquids (GTL) and biomass-to-liquids (BTL) - allows countries the option of diversifying the liquid fuel supplies.

Interest in constructing CTL plants tends to increase when the oil price is high and countries are concerned about the cost of their oil imports. When the oil price drops, the economics of coal to liquids plants are less favourable.

Emissions Reductions from Synthetic Fuels (Europe)

Source: Alliance for Synthetic Fuels in Europe

GHG Emissions

The conversion of any feedstock to liquid fuels is an energy intensive one. Emissions across the entire process have to be considered. While the coal to liquids process is more CO2 intensive than conventional oil refining, there are options for preventing or mitigating emissions. For coal to liquids plants, carbon capture and storage can be a low cost method of addressing CO2 concerns. Where co-processing of coal and biomass is undertaken, and combined with CCS, greenhouse gas emissions over the full fuel cycle may be as low as one-fifth of those from fuels provided by conventional oil.


CTL is particularly suited to countries that rely heavily on oil imports and that have large domestic reserves of coal