Coal bed methane commonly referred to as CBM is a form of natural gas which is produced from the coal bed deep down the earth surface. It is an unconventional source of gas. CBM is a byproduct of the coalification process, which consists of pure methane in majority of the fields. 

Coal bed methane gas is generally of two types: 
Biogenic (formed by bacterial action on coal)
Thermogenic (formed by heat and pressure applied on coal) 
Coal bed methane requires very little processing in the majority of instances and is pipeline quality gas, especially the biogenic gas. CBM is found mainly in bituminous and sub-bituminous coal which has better permeability but less gas content as compared to lignite coal which ranks less than bituminous and sub-bituminous coal. Permeability decreases and gas content increases with increasing coal rank. 

Coal bed methane exists almost exclusively in a condensed, liquid state. CBM reservoirs are different from sandstone or other conventional natural gas reservoirs, as the methane in CBM reservoirs is stored within the coal, as coal adsorbs the methane gas. Coal has high porosity therefore, it is able to absorb and retain large amount of gas. Unlike conventional natural gas, CBM contains very little amount of heavier hydrocarbons like propane or butane. Though, it may contain a few percent of carbon dioxide. 
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The quality of gas depends on the depth of the gas reservoir. Deep CBM reservoirs, generally with depth greater than 3,000 feet contain methane generated by cracking of kerogens and oil in coal to gas and is considered to be of superior quality compared to the gas found in shallow depths (