HOW TO EXIT COAL: 10 Criteria for Evaluating Corporate Coal Phase-Out Plans

The document argues that to meet the 1.5°C climate goal, new coal infrastructure must stop immediately and most existing plants must be retired by 2030. It provides a framework for financial institutions to assess corporate coal exit plans, emphasizing that credible plans must include facility-by-facility closure dates, a prohibition on selling assets to new owners, and a ban on converting plants to other fossil fuels or biomass. The briefing also highlights the necessity of funded just transition plans and the cessation of anti-climate lobbying and legal challenges via investor-state dispute settlement mechanisms.

• To align with the 1.5°C target, all coal expansion plans must be cancelled, and 80% of the global coal fleet must be closed by 2030, with all facilities globally closed by 2040. Specifically, all thermal coal facilities in the OECD, Eastern Europe, and the Former Soviet Union must be closed by 2030.
• Credible phase-out plans must specify facility-by-facility closure dates to allow for monitoring and the implementation of just transition plans. The document notes that as of the 2021 Global Coal Exit List, no coal company had produced an asset-by-asset closure timetable.
• Coal facilities must be permanently closed rather than sold to new owners, as divestment through sale does not result in actual emission cuts and may leave environmental liabilities unaddressed. Examples include ENGIE selling plants in Brazil and Anglo American spinning off coal assets into Thungela Resources.
• Coal plants should not be converted to fossil gas, biomass, or fossil-based hydrogen. The document argues that gas conversion risks creating new stranded assets, biomass can increase CO2 emissions per KWh and destroy forests, and 'blue' hydrogen has a greenhouse gas footprint more than 20% higher than burning natural gas or coal for heat.
• Claims regarding carbon capture and storage (CCS) retrofitting should not be used to delay closures, as these projects have proven to be expensive and technically unreliable. The IEA's 2021 net-zero pathway projects coal with CCS in 2030 will equal only 3% of current power sector coal consumption.
• Closures must be accompanied by funded just transition plans that address worker obligations and environmental remediation, such as cleaning up toxic coal ash ponds and rehabilitating old mine sites.
• Companies must stop all anti-climate lobbying and pledge not to use investor-state dispute settlement (ISDS) mechanisms, such as the Energy Charter Treaty (ECT), to challenge government coal exit policies.
• A Science-Based Target (SBTi) or net-zero commitment is not a sufficient substitute for a detailed coal phase-out plan because the SBTi does not currently require companies to set a specific coal phase-out date or adopt 1.5°C pathways.

APA

McCully, P., & Meister, S. (2021). HOW TO EXIT COAL: 10 Criteria for Evaluating Corporate Coal Phase-Out Plans. Reclaim Finance. https://reclaimfinance.org/site/wp-content/uploads/2021/10/Briefing_HowToExitCoal_ReclaimFinanceUrgewald_October2021-min.pdf

Chicago

McCully, Patrick, and Sonja Meister. HOW TO EXIT COAL: 10 Criteria for Evaluating Corporate Coal Phase-Out Plans. Reclaim Finance, 2021. https://reclaimfinance.org/site/wp-content/uploads/2021/10/Briefing_HowToExitCoal_ReclaimFinanceUrgewald_October2021-min.pdf.

Wikipedia

{{cite report |last1=McCully |first1=Patrick |last2=Meister |first2=Sonja |title=HOW TO EXIT COAL: 10 Criteria for Evaluating Corporate Coal Phase-Out Plans |publisher=Reclaim Finance |date=October 2021 |url=https://reclaimfinance.org/site/wp-content/uploads/2021/10/Briefing_HowToExitCoal_ReclaimFinanceUrgewald_October2021-min.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mccully2021how, author = {McCully, Patrick and Meister, Sonja}, title = {{HOW TO EXIT COAL: 10 Criteria for Evaluating Corporate Coal Phase-Out Plans}}, institution = {Reclaim Finance}, year = {2021}, month = oct, url = {https://reclaimfinance.org/site/wp-content/uploads/2021/10/Briefing_HowToExitCoal_ReclaimFinanceUrgewald_October2021-min.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }