The future of coal remains contested in many countries, hindering necessary energy transitions. Collaborative governance approaches, such as stakeholder commissions, have been proposed as potential solution to resolve such societal conflicts. In Germany, a stakeholder commission process managed to overcome the existing stalemate situation, leading to the adoption of a coal phase-out by 2038. Celebrated for enabling the German coal phase-out, the commission’s outcomes are ambiguous, recommending a coal phase-out incompatible with the 1.5 °C climate target and granting high financial compensations to coal regions. Based on 18 semi-structured interviews with members of this “Commission on Growth, Structural Change and Employment”, we analyze how the stalemate situation in the German conflict over the future of coal was overcome and how the commission’s outcome was formed. We find that the absence of alternative ways to enforce their interests, and external political, economic, and societal pressure were crucial factors that motivated interest groups to engage in the commission. The commission facilitated trust-building among members, and compromise offers behind closed doors among key actors, ultimately overcoming the stalemate in the contentious environment. Yet, existing and remaining power imbalances within the commission resulted in the decision-making process being dominated by incumbent actors. Having shifted discussions in Germany from if to how to phase out coal, enabled the next government to move the agreed-on phase-out date from 2038 to 2030. Our research contributes to the debate on politics of fossil fuel phase-outs and can inform future collaborative governance approaches in the context of contested sustainability transitions.