You are spot on.
Coal gas was a large contributor to their war effort. The problem with coal gas, as pointed out in another blog on here about the US military keeping it as an option, it is very polluting.
The Germans did not care about the environment, but the stuff was brutal on engines.
They did a lot of work late in the war on biofuels to mix with the coal gas to reduce the carbon fouling of the engines. By that point they had lost the fertile fields of southern France and the effort was pointless.