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Environmental record
The practice of extracting coal from the earth for energy production purposes has been the subject of controversy for an extended duration of time. Critics have expressed concern regarding Peabody Energy’s initial opposition to the Clean Air Act and other environmental regulations, as well as its support for the expanded use of coal generated electricity as a means of meeting increasing worldwide energy usage demands. The Natural Resources Defense Council has been critical of Peabody’s advocacy for expanding coal generated electricity in the U.S., specifically on account of the environmental impacts of surface mining operations. The environmental impact of Peabody’s surface mining operations in Muhlenberg County, Kentucky was also the subject of criticism in John Prine’s 1971 song “Paradise.” In Newsweek's 2011 Green Rankings, Peabody Energy was ranked #9 out of the top 500 largest US companies based on their environmental impact.

Peabody Energy states its mission as “to be a leading worldwide producer and supplier of sustainable energy solutions, which power economic prosperity and result in a better quality of life,” and to return mined lands to a “condition that is equal to or better than before mining occurred. Peabody launched its first land reclamation program, Operation Green Earth, in 1954. Since then, Peabody’s activities in regards to the pursuit of its mission, specifically concerning environmental sustainability practices, have been recognized by regulators and industry groups, but have raised concerns among its critics, primarily some environmental advocacy organizations. The company has taken steps to enact environmental restoration and has been recognized by the United States Department of the Interior, for their reclamation efforts.

In response to federal legislation, such as the 1970 Clean Air Act and the 1990 Clean Air Act amendments, and environmental criticism of its mining operations, Peabody has directed investments in technologies and equipment that serve to mitigate adverse environmental effects of their coal mining operations. In 2007, the company became the only non-Chinese equity partner 650-megawatt near-zero emissions coal plant. Peabody has also invested invested in the development of carbon capture technologies and coal-to-gas and coal-to-hydrogen projects.