The conversion of medium-and low-temperature coal tar into high-performance fuel and value-added chemicals is one of the main approaches to addressing the current global energy challenges. To this aim, an innovative coal tar processing process has been developed, which enables the efficient transformation. This process is suggested to produce phenolic compounds and naphthenic oil. As the hydrogenation of coal tar involves complex chemical structures and reactions, a systematic matrix of model compounds was presented on the basis of qualitative and quantitative analytics to represent the coal tar and hydrogenation products. The kinetics modeling of tar hydrogenation was proposed to optimize the process parameters and predict the characteristics of products. The energy efficiency (81.62%) and the element utilization (carbon (88.21%), hydrogen (87.13%), and oxygen (31.25%)) associated with the whole process are calculated. From the life cycle assessment, the energy use, the CO 2 emission, and the target costing of the proposed coal tar process are calculated as 10.82 MJ/CNY, 2.71 kg CO 2 -eq/CNY, and 3141.2 CNY/t-product, respectively.