Charcoal is mostly pure carbon, called char, made by cooking wood in a low oxygen environment, a process that can take days and burns off volatile compounds such as water, methane, hydrogen, and tar. In commercial processing, the burning takes place in large concrete or steel silos with very little oxygen, and stops before it all turns to ash. The process leaves black lumps and powder, about 25% of the original weight.
When ignited, the carbon in charcoal combines with oxygen and forms carbon dioxide, carbon monoxide, water, other gases, and significant quantities of energy. It packs more potential energy per ounce than raw wood. Char burns steady, hot, and produces less smoke and fewer dangerous vapors.