Material and energy balances were prepared for two coal conversion options for the co-production of liquid hydrocarbon products and electricity. The results are compared to the alternative approach of producing liquid hydrocarbons from natural gas. It is concluded that the capital cost for coal conversion must be higher but that cash operating costs may be similar. There are important synergistic effects so that facilities co-producing liquid hydrocarbons and electricity from coal are more efficient than facilities producing these products individually. There may be good strategic reasons to use clean coal conversion plants co-producing liquid hydrocarbons and electricity. Due to the huge capital investments required, some form of government assistance will be needed. (C) 2003 Elsevier Ltd. All rights reserved.