You will need:
-a furnace, create it from cobblestone
- 3 or more wood
Furnace is created with stone/cobble stone in the crafting table.
Once this is created you will place it somewhere to begin the smelting process.
Once placed you will need to click on the furnace to open it, place the wood in the top slot as the main ingredient and bottom slot also place wood (Coal can be used as a fuel the first time to make the charcoal) as fuel.
This should result in creating the Charcoal. Now take the charcoal and place it in the bottom slot of the furnace and make sure you have wood in the top slot and this should unlock the achievement once it syncs with the server.