Researchers from Rice University developed a simple method to reduce coal into graphene quantum dots (GQDs). Different types of coal produce differently-sized quantum dots (ranging from 2 to 20 nanometers). The yield is also very good - about 20% of the coal can be turned into GQDs. Those GQDs are water-soluble and non toxic (according to early tests).
This is a chemical method - the coal is crushed and than soaked in acid solutions (nitric and sulfuric acids) for 24 hours. This breaks the bonds that hold the tiny GQDs together.