Coal liquefaction processes provide a basis to transform a solid into liquid fuels that are suitable for transportation purposes but release a wide range of air emissions, water effluents, and solid wastes, with considerable potential for locally reducing environmental quality. Compared with other major sources of emissions such as coal-fired power-plants, liquefaction plants release relatively low levels of emissions of sulphur dioxide and nitrogen oxides for an equivalent quantity of coal-feed. However, coal liquefaction processes potentially release hydrocarbons to air, water, and land. The ‘direct’ coal liquefaction processes, which hydrogenate coal under high temperature and pressure, may release potentially more hazardous hydrocarbons than ‘indirect’ processes, which break down coal by partial combustion and then synthesize liquid fuel. The presence of polynuclear aromatic hydrocarbons in process streams of ‘direct’ processes, and their heavy fuel products, may require special processing to minimize environmental intrusion.

Environmental issues in the US are dependent on where coal resources are developed. Plants located in the humid eastern US are likely to have discharges to receiving streams, many of which are already ‘water quality limited.’ Thus eastern locations are more likely to have water quality-related problems and issues than western US locations. However, because of water consumption requirements of the coal liquefaction processes, arid western locations are more likely to experience water availability issues. These more arid regions may also experience greater potential effects on terrestrial environments, as the assimilative capacity and regrowth of vegetation is typically lower in arid than in humid environments.