When you burn wood incompletely, you would have seen the black residue left behind. This is charcoal.
So, that kind of explains how you make charcoal: Incomplete combustion of biomass!
Technically, charcoal is made from biomass through a process called pyrolysis.
The pyrolysis process for charcoal production involves heating of biomass to about 300-400 deg C in an environment with no supply of air (oxygen). (Pyrolysis as a process is sometimes done even at much higher temperatures, but these are usually for materials such as plastics)
While more sophisticated systems have emerged in some parts of the world, pyrolysis in many parts of the world is done in a fairly rudimentary (which some say is even crude) manner. The biomass that needs to be turned into charcoal is stacked into a pile, and through a variety of mechanisms this biomass is completely covered – sometimes with other leafy biomass, and finally by mud. A fire is lit through a small opening, which also subsequently gets covered. These covered piles are allowed to burn for 3-7 days, after which the charcoal is taken out from the inside.
What happens under such conditions is that there no supply of air (and hence oxygen) to the biomass, ideal conditions for pyrolysis in which the biomass is not burnt completely but is converted into charcoal, in addition to some organic gases and a bio-oil. Interestingly, in many cases, the bio-oil and the organic gases are not captured, even though both could also be used as fuels!
This charcoal from biomass, also called bio-coal or bio-charcoal, has a high calorific value (equal to high quality coal and much higher than the biomass it came from), and can be used in a variety of heating environments.
Another emerging use for charcoal is in its use to produce activated carbon, a material used in the filtration industry.
Of late, I have been getting a number of enquiries from entrepreneurs keen on investing in the bio-charcoal business, as the demand for this appears to be steadily on the rise.
Here’s a pretty detailed link on charcoal production – a bit technical though.