The on-site generation of fuel gas from coal is one of the currently available technologies that may facilitate the reintroduction of indirect coal firing in industrial practice. In the present article the attention will be restricted to gasifiers with comparatively small unit capacities, producing low heating-value gas by gasification of coal with air. The article is intended to provide the reader with a broad review of the available technology, the implications of using coal-derived fuel gas a substitute for conventional fuels, and the economic viability of on-site fuel gas generation. On the basis of cost estimates, framed within the Western European situation, the competitiveness of low heating-value gas are discussed. A comparison is made between low and medium heating-value gas, natural gas and direct coal firing. Potential markets for low heating-value fuel gas are identified and discussed.