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, the global coal industry must be phased out rapidly, with 80% of the global fleet and all facilities in the OECD, Eastern Europe, and the Former Soviet Union closed by 2030. It provides financial institutions with a ten-point framework to assess corporate phase-out plans, emphasizing that plans must include facility-by-facility closure dates, prohibit the sale of assets to new owners, and forbid conversion to fossil gas, biomass, or fossil-based hydrogen. The briefing also warns against using carbon capture and storage (CCS) or Science-Based Targets (SBTi) as substitutes for concrete closure plans and insists on funded just transition roadmaps and the cessation of anti-climate lobbying and investor-state dispute settlement (ISDS) claims.

• To align with the 1.5°C target, all coal expansion must cease immediately, and a significant majority of the global coal fleet must be retired by 2030, with total global closure by 2040. Specifically, all thermal coal facilities in the OECD, Eastern Europe, and the Former Soviet Union must be closed by 2030, and 80% of the global coal fleet must be closed by that same date.
• Credible phase-out plans must ensure real emission reductions by requiring the actual closure of facilities rather than their sale to new owners, which the document notes does not result in emission cuts and may increase risks for local communities.
• The document argues that converting coal plants to fossil gas, biomass, or fossil-based hydrogen is unacceptable. Fossil gas has high indirect climate impacts from methane leakage, biomass can increase CO2 emissions per KWh and destroy forests, and fossil-based hydrogen (gray or blue) maintains a high carbon footprint.
• Claims regarding carbon capture and storage (CCS) should not be used to delay closures, as the document describes CCS retrofits as 'expensive fiascos' that are technically and economically unviable in the foreseeable future.
• Phase-out plans must be accompanied by funded just transition roadmaps that include environmental remediation, such as cleaning up toxic coal ash ponds and rehabilitating abandoned mine sites, as well as support for workers.
• Companies should pledge not to use investor-state dispute settlement (ISDS) mechanisms, such as the Energy Charter Treaty (ECT), to sue governments for compensation over mandated coal phase-outs, as this creates a 'chilling effect' on climate legislation.
• A Science-Based Target (SBTi) or net-zero commitment is not a sufficient substitute for a credible coal phase-out plan because the SBTi does not currently require 1.5°C pathways or specific coal phase-out dates.

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/How-to-exit-coal-briefing.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/How-to-exit-coal-briefing.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/How-to-exit-coal-briefing.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/How-to-exit-coal-briefing.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }