The Coal liquefaction processes are classified as direct conversion to liquids processes and indirect conversion to liquids processeses. Direct processes are carbonization and hydrogenation.

Pyrolysis and carbonization processes

There are a number of carbonization processes. The carbonization conversion occurs through pyrolysis or destructive distillation, and it produces condensable coal tar, oil and water vapor, non-condensable synthetic gas, and a solid residue-char. The condensed coal tar and oil are then further processed by hydrogenation to remove sulfur and nitrogen species, after which they are processed into fuels.

The typical example of carbonization is the Karrick process. The process was invented by Lewis Cass Karrick in the 1920s. The Karrick process is a low-temperature carbonization process, where coal is heated at 680 °F (360 °C) to 1,380 °F (750 °C) in the absence of air. These temperatures optimize the production of coal tars richer in lighter hydrocarbons than normal coal tar. However, the produced liquids are mostly a by-product and the main product is semi-coke, a solid and smokeless fuel.

The COED Process, developed by FMC Corporation, uses a fluidized bed for processing, in combination with increasing temperature, through four stages of pyrolysis. Heat is transferred by hot gases produced by combustion of part of the produced char. A modification of this process, the COGAS Process, involves the addition of gasification of char. The TOSCOAL Process, an analogue to the TOSCO II oil shale retorting process and Lurgi-Ruhrgas process, which is also used for the shale oil extraction, uses hot recycled solids for the heat transfer.

Liquid yields of pyrolysis and Karrick processes are generally low for practical use for synthetic liquid fuel production. Furthermore, the resulting liquids are of low quality and require further treatment before they can be used as motor fuels. In summary, there is little possibility that this process will yield economically viable volumes of liquid fuel.

Hydrogenation processes

One of the main methods of direct conversion of coal to liquids by hydrogenation process is the Bergius process. The Bergius process was developed by Friedrich Bergius in 1913. In this process, dry coal is mixed with heavy oil recycled from the process. Catalyst is typically added to the mixture. The reaction occurs at between 400 °C (752 °F) to 5,000 °C (9,030 °F) and 20 to 70 MPa hydrogen pressure. The reaction can be summarized as follows:

n C + (n + 1) H₂ → C_nH_{2 n + 2}

After World War I several plants were built in Germany; these plants were extensively used during World War II to supply Germany with fuel and lubricants. The Kohleoel Process, developed in Germany by Ruhrkohle and VEBA, was used in the demonstration plant with the capacity of 200 ton of lignite per day, built in Bottrop, Germany. This plant operated from 1981 to 1987. In this process, coal is mixed with a recycle solvent and iron catalyst. After preheating and pressurizing, H₂ is added. The process takes place in a tubular reactor at the pressure of 300 bar and at the temperature of 470 °C (880 °F). This process was also explored by SASOL in South Africa.

In 1970-1980s, Japanese companies Nippon Kokan, Sumitomo Metal Industries and Mitsubishi Heavy Industries developed the NEDOL process. In this process, coal is mixed with a recycled solvent and a synthetic iron-based catalyst; after preheating H₂ is added. The reaction takes place in a tubular reactor at temperature between 430 °C (810 °F) and 465 °C (870 °F) at the pressure 150-200 bar. The produced oil has low quality and requires intensive upgrading. H-Coal process, developed by Hydrocarbon Research, Inc., in 1963, mixes pulverized coal with recycled liquids, hydrogen and catalyst in the ebullated bed reactor. Advantages of this process are that dissolution and oil upgrading are taking place in the single reactor, products have high H/C ratio, and a fast reaction time, while the main disadvantages are high gas yield (this is basically a thermal cracking process), high hydrogen consumption, and limitation of oil usage only as a boiler oil because of impurities.

The SRC-I and SRC-II (Solvent Refined Coal) processes developed by Gulf Oil and implemented as pilot plants in the United States in the 1960s and 1970s. The Nuclear Utility Services Corporation developed hydrogenation process which was patented by Wilburn C. Schroeder in 1976. The process involved dried, pulverized coal mixed with roughly 1wt% molybdenum catalysts. Hydrogenation occurred by use of high temperature and pressure synthesis gas produced in a separate gasifier. The process ultimately yielded a synthetic crude product, Naphtha, a limited amount of C₃/C₄ gas, light-medium weight liquids (C₅-C₁₀) suitable for use as fuels, small amounts of NH₃ and significant amounts of CO₂. Other single-stage hydrogenation processes are the Exxon Donor Solvent Process, the Imhausen High-pressure Process, and the Conoco Zinc Chloride Process.

There is also a number of two-stage direct liquefaction processes; however, after 1980s only the Catalytic Two-stage Liquefaction Process, modified from the H-Coal Process; the Liquid Solvent Extraction Process by British Coal; and the Brown Coal Liquefaction Process of Japan have been developed.

Shenhua, the Chinese coal miner, decided in 2002 to build a direct liquefaction plant in Inner Mongolia, with barrel capacity of 20 thousand barrels per day (3.2×10³ m³/d). First tests were implemented at the end of 2008. A second and longer test campaign was started in October 2009.

Chevron Corporation developed a process invented by Joel W. Rosenthal called the Chevron Coal Liquefaction Process (CCLP). It is unique due the close-coupling of the non-catalytic dissolver and the catalytic hydroprocessing unit. The oil produced had properties that were unique when compared to other coal oils; it was lighter and had far fewer heteroatom impurities. The process was scaled-up to the 6 ton per day level, but not proven commercially.

Indirect conversion processes

The main indirect process is the Fischer-Tropsch process. In this process, coal is first gasified to make syngas (a balanced purified mixture of CO and H₂ gas). Next, Fischer-Tropsch catalysts are used to convert the syngas into light hydrocarbons (like ethane) which are further processed into gasoline and diesel. This method was used on a large technical scale in Germany between 1934 and 1945 and is currently being used by Sasol in South Africa. In addition to creating gasoline, syngas can also be converted into methanol, which can be used as a fuel, or into a fuel additive.

Syngas may be converted to liquids through conversion of the syngas to methanol which is subsequently polymerized into alkanes over a zeolite catalyst. This process, named as the Mobil MTG Process, was developed by Mobil in early 1970s.