
As shown in image above, Tar Kiln requires 5x5 tiles of flat, paved terrain. Note that kilns shown in the image could have been squeezed slightly denser by pressing CTRL when placing them but I went with default center to grid so that they won't form wall you have to circle around.
Tar Kiln softcaps the quality of charcoal it produces. This shouldn't be issue when burning q10 blocks from "natural" trees unless you dig materials with alt that has only 1 survival. At the start of w8 me and my friend ended up having everything made of metal be quality 8 because we did that.
"Easiest" way to get above q10 charcoal is to get as high quality as possible Bone Saw and burn boards in the kiln. Clay and stone above q10 are relatively common in shallow waters and stone patches all over the game world.