Australia's biggest thermal coal producer, Glencore, has reversed its commitment to limit its annual coal production to 150 million tonnes. 

This move marks a departure from a climate pledge made in 2019, under the leadership of then chief executive Ivan Glasenberg, to transition its coal mines towards closure rather than sell them off.

Since announcing the cap, Glencore's coal production has remained below the set threshold, with figures ranging between 103 million and 113 million tonnes in the following years. 

However, this year is poised for significant growth in Glencore's coal division, especially with the pending closure of a $10.5 billion deal with Canada's Teck Resources. 

This acquisition is expected to add approximately 26 million tonnes of coal to its annual production.

Despite this growth, Glencore may spin out its coal division within two years after finalising the Teck acquisition, according to CEO Gary Nagle. 

The company has justified the removal of its production cap by highlighting its reduced thermal coal production and the absence of new greenfield thermal coal mine developments.

Glencore's strategic update suggests a nuanced approach to coal production, acknowledging it might not align linearly with net zero scenarios outlined by global climate bodies. 

The company pointed to the potential continued need for unabated thermal coal in electricity generation beyond 2040, should clean energy and carbon capture technologies not advance sufficiently.

This policy reversal occurs amidst broader trends of companies and governments diluting their climate commitments. 

Notably, UK Prime Minister Rishi Sunak recently delayed phasing out carbon-intensive technologies, and major oil firms have scaled back their production cut promises.

Sydney investor Tribeca has urged Glencore to retain its coal division, contradicting the company's demerger considerations.