A U.S. research institute says it is partnering with the Department of Energy to test a method for producing liquid transportation fuels from coal and biomass.

The Southern Research Institute said the goal was to improve the economics and lifecycle impacts of coal-to-liquid and coal-biomass-to-liquid processes.

The new approach eliminates the typical product upgrading and refining steps known as the Fischer-Tropsh process and enhances the ability of CTL and CBTL processes to compete with petroleum-based processes, an institute release said Monday.

The testing, with $1.5 million in Department of Energy funding, will use a synthesis reactor system to produce liquid transportation fuels using a selective, wax-free FT catalyst developed by Chevron, the researcher said.

The goal is an alternative coal fuel process more environmentally and economically competitive with petroleum-based methods, they said.

"We will evaluate the impact of adding moderate amounts of biomass to coal on CBTL products and process economics, and compare the carbon footprint of CBTL processes with petroleum-based fuel production processes," SRI principle investigator Santosh K. Gangwal said.