The selectivity for hydrodesulfurization over hydrogenation has been examined in a new short residence time catalytic two-stage SRC process, which has the potential of producing a low-sulfur solid SRC product to meet the newly proposed EPA new point source emission standards (NPSES). In the first stage of the process, residence time and hydrogen consumption are minimized through the use of an inexpensive mineral catalyst (SRC residue ash) that has been treated under a combustion environment to improve its selectivity for hydrodesulfurization over hydrogenation. The second stage of the process involves hydrotreating the filtered liquid product with a commercial Co-Mo-Al catalyst, before splitting into a solid SRC and solvent recycle by distillation. Several process variables - such as type of coal, catalyst, temperature, hydrogen partial pressure, and reaction time - have been examined to provide information on hydrogen consumption, product distribution, sulfur removal, SRC yield and solvent quality. The results show that the ash of SRC residue can be used to selectively catalyze desulfurization over hydrogenation in SRC processing. Selectivity for desulfurization in two stage hydrodesulfurization of coal is improved by using high reaction temperatures, short residence times, the ash of SRC residue as a first stage catalyst, and Co-Mo-Al as a second stage catalyst. Two stage catalytic SRC processing is more selective for hydrodesulfurization than catalytic or non-catalytic single stage SRC processing. © 1979.