”Clean coal” is an industry term which refers to increasing the efficiency of coal mining, making power plants which use coal for energy generation more environmentally friendly, and/or making coal itself more fuel efficient and clean burning. Since coal contributes a large volume of carbon dioxide to the Earth's atmosphere every year, the idea of cleaning up coal is quite appealing to many consumers and governments. In any discussion of clean coal, it is important to remember that carbon dioxide is still released in the environment when coal is used for fuel, and other harmful emissions are created as well. In addition, since coal is a fossil fuel, ultimately the world's coal reserves may be exhausted.

Many environmentalists term the concept of clean coal “greenwashing,” meaning that companies are using the concept to make themselves look better. They argue that since coal is a fossil fuel, investing in cleaner coal technology is not as sound as investment in renewable energy. However, most environmentalists would also agree that if coal is going to be used as a fuel, it might as well be used cleanly.

The creation of coal started millions of years ago, when decaying plant and animal matter began to compress, ultimately forming the world's coal and petroleum deposits. Coal has been utilized as a fossil fuel for centuries, ever since humans realized that the substance was burnable. It naturally appears in large deposits of brownish to black flaky material, which are mined in large volumes.

Coal mining and processing can lead to pollution, just as many industrial processes do. Making the mining process more clean and efficient is one way to create clean coal. In addition, many countries now chemically wash their coal to remove some impurities. Removing these impurities before burning ensures that they will not be released into the atmosphere, although the chemicals and impurities still need to be appropriately dealt with so that they do not enter the environment.

Since most modern coal is burned in power plants to generate electricity, making power plants cleaner and more efficient is an important part of clean coal as well. Coal burning power plants are often old and highly inefficient, since coal is cheap and readily available, making increased efficiency not financially logical. Many countries have started to mandate that power plants scrub the air in their exhaust stacks with filters before releasing it, and that power companies take steps to make sure that the energy in coal is fully utilized when it is burned.

The final sort of clean coal is not really coal at all, but an entirely new product known as gasified coal. Gasified coal is coal which has been treated to turn it into a gaseous fuel such as methane or hydrogen, while extracting the bulk of the harmful carbon dioxide in the coal. The gaseous fuel is burned for energy, yielding cleaner and more environmentally sound coal-based energy. Since natural gas prices began skyrocketing in the late 1990s, gasified coal began to attract attention.

To produce gasified coal, the coal is mixed with a catalyst and subjected to high levels of heat and steam. This causes a chemical reaction, which separates the coal into hydrogen, methane, carbon monoxide, carbon dioxide, and other inorganic solids which filter out. The hydrogen and methane can both be used as fuels, while the carbon dioxide is often injected deep into the ground or otherwise disposed of. In theory, a coal fired power plant could become zero emission by using this clean coal technology. This process may also eventually yield liquid fuels from coal.