Carbonaceous material, which can comprise municipal waste, biomass, wood, coal, or a natural or synthetic polymer, is converted to a stream of methane and carbon monoxide rich gas by heating the carbonaceous material in a fluidized bed reactor using hydrogen, as fluidizing medium, and using steam, under reducing conditions at a temperature and pressure sufficient to generate a stream of methane and carbon monoxide rich gas but at a temperature low enough and/or at a pressure high enough to enable the carbonaceous material to be fluidized by the hydrogen. In particular embodiments, the fluidizing mixture can be a combination of hydrogen and steam. The stream of methane and carbon monoxide rich gas can be subjected to steam methane reforming under conditions whereby synthesis gas comprising hydrogen and carbon monoxide is generated. Synthesis gas generated by the steam methane reforming is fed into a Fischer-Tropsch reactor under conditions whereby a liquid fuel is produced. Excess hydrogen from the steam methane reformer can be fed back to the fluidized bed reactor. Exothermic heat from the Fischer-Tropsch reaction can be transferred to the hydro-gasification reactor.
