Dismissed by environmentalists as the world’s dirtiest fuel, coal will still figure prominently in the global energy mix. Demand for technology that cleans up coal’s act will explode in coming years.

Republicans gained a number of Congressional seats in the November 2010 midterm elections, but the GOP’s most impressive victory involved pushing through its tax plan before the Tea Party-flavored freshman class even took office.

Although the deal required a bit of compromise, this success should embolden the new majority to tackle other priorities on its agenda, including a long-discussed revamp of US energy policies.

Coal will figure prominently in this discussion. Cheap and plentiful, coal has overcome its environmental drawbacks to become the world’s leading feedstock for electricity generation. This popularity explains why power plants are the top source of US greenhouse gas emissions. (See “It’s Electric”)

Any successful legislation will balance Republicans’ support for coal as a key component of US energy security with Democrats’ environmental concerns. Incentives that encourage the development and implementation of clean-coal technologies will help bring the two sides together. Such a compromise would be a boon for companies working on these solutions.

Existing emissions-reducing technologies fall into two categories: pre-combustion or post-combustion.

Pre-combustion processes introduce an additive to coal, ensuring that the fuel burns at an optimal temperature. These additives also bind to mercury and other contaminants to reduce harmful emissions. Besides providing environmental benefits, these supplements enable power plants to burn a wider range of coals, affording operators a degree of fuel flexibility.

Post-combustion solutions focus almost exclusively on carbon capture and sequestration, whereby carbon dioxide (CO2) emissions are captured at the source, transferred to a secure location and compressed. Possible depositories include depleted oil and gas reservoirs, coal seams that can’t be mined, deep saline formations or the deep ocean.

Here are three of our top plays on increasing support for clean-coal technologies.

Cleaning Up

ADA-ES (NSDQ: ADES) develops environmental technologies and specialty chemicals that reduce emissions of CO2, mercury and other hazardous chemicals. The firm’s lineup of pre- and post-combustion solutions is geared toward coal-fired power plants but can also be used in kilns for Portland cement, a key ingredient in concrete.

ADA-ES’ marquee product is an injection system that blows activated carbon into a plant’s emission stream. Processed to increase porosity and surface area, the activated carbon binds with vaporized mercury to form a powder that’s easily collected. This system can reduce mercury emissions by more than 90 percent, ensuring compliance with environmental regulations.

In addition to designing and selling these injection systems, ADA-ES operates North America’s largest activated-carbon production facility. The firm also manufactures CyClean and other specialty chemicals that reduce contaminants emitted during combustion.

The company posted losses in 2008 and 2009, as the financial crisis and Great Recession curbed investment in systems that control emissions. Consensus estimates call for ADA-ES to record a loss of about $1.80 per share in 2010.

But ADA-ES’ earnings should improve in 2011. A recently inked deal that leases the firm’s mercury-control technology to Arch Coal (NYSE: ACI) could generate annual revenue of more than $100 million. Another contract with the US Dept of Energy will pay the company $19 million to scale up sequestration technologies at a number of test facilities.

With the Environmental Protection Agency likely to introduce stricter emissions limits on cement kilns and coal-fired boilers in 2011, there’s plenty of upside for the company’s activated-carbon business.

However, the company has been named in a number of recent lawsuits. Of particular concern is Netherlands-based Norit’s claim that ADA-ES misappropriated trade secrets in the construction of its activated-carbon production facility. The two companies are currently in arbitration over the matter, with a resolution expected in the first quarter of 2011.

That being said, ADA-ES is a speculative play suitable for aggressive investors who have a longer time horizon. The company operates in an industry with attractive prospects and could eventually be acquired by a larger competitor.

Dirty Secret

Long maligned as dirty and dangerous, the coal industry stands to benefit the most from clean-coal technology, which would help ensure the fuel’s position as the workhorse of electricity generation.

Market Vectors Coal (NYSE: KOL) provides one-stop exposure to global coal demand, which the US Energy Information Administration forecasts will balloon by 56 percent between now and 2035.

Focused primarily on mid-cap coal miners, the exchange-traded fund allocates more than 47 percent of its assets to US-based operations and offers ample exposure to China’s voracious appetite for coal through both local and regional miners.

With an expense ratio of just 0.59 percent and substantial exposure to the US and Chinese coal markets, Market Vectors Coal is a buy up to 51.