Synthesis gas (syngas) produced from coal typically has hydrogen to carbon monoxide ratios in the range of approximately 0.7-1.1, depending on the gasification method. In order to produce liquid fuels from this syngas by Fischer-Tropsch synthesis (FTS), these ratios must be raised to 2.0 or higher. If this is accomplished by the water-gas shift reaction, the traditional method, large emissions of carbon dioxide are produced. In this paper, it is shown that catalytic dehydrogenation (CDH) of the gaseous C1-C4 products of FT synthesis and recycling of the resulting hydrogen to the syngas feed-stream can increase the H(2)/CO ratio to the desired values with little or no production of carbon dioxide. All carbon from the CDH reaction is in the form of a potentially valuable by-product, multi-walled carbon nanotubes (MWCNT). The amounts of hydrogen and MWCNT produced, carbon dioxide emissions avoided, and water saved are calculated for a 50,000 bbl/day FTS-CDH plant and it is demonstrated that the energy balance for the process is favorable. Methods of utilizing the large quantity of MWCNT produced are discussed. (C) 2011 Elsevier Ltd. All rights reserved.