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Coal is an abundant fuel source that is relatively inexpensive to produce and convert to useful energy. However, producing and using coal affects the environment.

Surface mines (sometimes called strip mines) were the source of about 64% of the coal mined in the United States in 2020. These mining operations remove the soil and rock above coal deposits, or seams. The largest surface mines in the United States are in Wyoming's Powder River Basin, where coal deposits are close to the surface and are up to 70 feet thick.

Mountaintop removal and valley fill mining has affected large areas of the Appalachian Mountains in West Virginia and Kentucky. In this form of coal extraction, the tops of mountains are removed using explosives. This technique changes the landscape, and streams are sometimes covered with rock and dirt. The water draining from these filled valleys may contain pollutants that can harm aquatic wildlife downstream. Although mountaintop mining has existed since the 1970s, its use became more widespread and controversial beginning in the 1990s.

U.S. laws require that dust and water runoff from areas affected by coal mining operations must be controlled, and the area must be reclaimed close to its original condition.

Some electric power plants use scrubbers (flue gas desulfurization equipment) to reduce the amount of sulfur exiting their smokestacks. The power plants use electrostatic precipitators or baghouses to remove particulates and heavy metals from the smoke.

Underground mines generally affect the landscape less than surface mines. However, the ground above mine tunnels can collapse, and acidic water can drain from abandoned underground mines.

Methane gas that occurs in coal deposits can explode if it concentrates in underground mines. This coalbed methane must be vented out of mines to make mines safer places to work. In 2019, methane emissions from coal mining and abandoned coal mines accounted for about 8% of total U.S. methane emissions and about 1% of total U.S. greenhouse gas emissions (based on global warming potential). Some mines capture and use or sell the coalbed methane extracted from mines.

Several principal emissions result from coal combustion:

In the past, fly ash was released into the air through the smokestack, but laws now require that most emissions of fly ash be captured by pollution control devices. In the United States, fly ash and bottom ash are generally stored near power plants or placed in landfills. Pollution leaching from coal ash storage and landfills into groundwater and several large impoundments of coal ash that ruptured are environmental concerns.

The Clean Air Act and The Clean Water Act require industries to reduce pollutants released into the air and water.

The coal industry has found several ways to reduce sulfur and other impurities from coal. The industry has also found more effective ways of cleaning coal after it is mined, and some coal consumers use low sulfur coal.

Power plants use flue gas desulfurization equipment, also known as scrubbers, to clean sulfur from the smoke before it leaves their smokestacks. In addition, the coal industry and the U.S. government have cooperated to develop technologies that can remove impurities from coal or that can make coal more energy efficient, which reduces the amount of coal that is burned per unit of useful energy produced.

Equipment intended mainly to reduce SO2, NOx, and particulate matter can also be used to reduce mercury emissions from some types of coal. Scientists are also working on new ways to reduce mercury emissions from coal-burning power plants.

Research is underway to address emissions of CO2 from coal combustion. One method is carbon capture, which separates CO2 from emissions sources and recovers it in a concentrated stream. The CO2 can then be injected underground for permanent storage, or sequestration.

Reuse and recycling can also reduce the environmental effects of coal production and use. Land that was previously used for coal mining can be reclaimed and used for airports, landfills, and golf courses. Waste products captured by scrubbers can be used to produce products such as cement and synthetic gypsum for wallboard.