Lignite, often referred to as brown coal, is the lowest rank of coal and used almost exclusively as fuel for steam-electric power generation. It is brownish-black and has a high inherent moisture content, sometimes as high as 66 percent, and very high ash content compared to bituminous coal. It is also a heterogeneous mixture of compounds for which no single structural formula will suffice.

The heat content of lignite ranges from 9 to 17 million Btu per short ton (10 to 20 MJ/kg) on a moist, mineral-matter-free basis. The heat content of lignite consumed in the United States averages 13 million Btu/ton (15 MJ/kg), on the as-received basis (i.e., containing both inherent moisture and mineral matter). When reacted with quaternary amine, amine treated lignite (ATL) forms. ATL is used in oil well drilling fluids to reduce fluid loss.

Because of its low energy density, brown coal is inefficient to transport and is not traded extensively on the world market compared to higher coal grades. It is often burned in power stations constructed very close to any mines, such as in Australia's Latrobe Valley. Carbon dioxide emissions from brown coal fired plants are generally much higher than for comparable black coal plants. The continued operation of brown coal plants, particularly in combination with strip mining and in the absence of emissions-avoiding technology like carbon sequestration, is politically contentious.