Germany has plentiful deposits of coal, particularly brown coal, or lignite, but very little petroleum. Friedrich Bergius sought to improve on the discoveries of Marcellin Berthelot (1827-1907), who in 1869 reported coal hydrogenation experiments using higher pressures of hydrogen, envisioning an industrial-sized operation. Since different types of coal vary in their suitability for hydrogenation, Bergius tested a multitude of coal samples and determined that soft coal and lignite rather than hard, or anthracite, coal work best for hydrogenation.

The reactions released heat, which needed to be dissipated since excessive temperature produced coke, which resisted hydrogenation. Powdered coal was made into a paste with oil and subjected to hydrogen gas. The oil helped to make the heating more uniform. The reaction produced various hydrocarbons as the hydrogen broke down the complex carbon-atom network in the coal. Bergius designed both rotating and stationary autoclaves to facilitate mixing and temperature control, and he was able to handle batches of four hundred liters.

The inefficiency of the batch process led Bergius to develop a continuous process on a larger scale. The paste of powdered coal and oil was preheated and forced into a reactor by a ram, while products were continuously removed. The reactor consisted of a steel cylinder eight meters long and one meter in diameter mounted horizontally. Temperature control was important, and Bergius developed a heat-exchange method involving bathing the reactor in a stream of inert gas at the proper temperature. The hydrogen needed for the process was available from the action of steam on hot coke (water gas reaction) but needed to be freed of carbon monoxide. Previous workers had done this by cooling the gas mixture enough to liquefy the carbon monoxide. Bergius was able to conduct the water gas reaction at a lower temperature by working at high pressure with a thallium chloride catalyst. Under these conditions, the carbon monoxide was converted to the dioxide, which could be removed by reaction with alkali. Serendipitously, Bergius discovered that the high-temperature water was reacting with the iron parts of the reactor, producing hydrogen gas. This reaction he developed into a method for making large quantities of pure hydrogen-reacting water with iron filings at high temperature and pressure. The by-product iron oxide could be reduced back to iron and reused. . .

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