The Financial Conduct Authority concluded a nearly 10-month investigation into Drax, the operator of a major power plant in Selby, North Yorkshire, without taking further action against the company. The regulator examined whether the company’s annual reports and accounts from 2021 through 2023 contained statements that misled shareholders or omitted material information about its biomass fuel sourcing practices. After reviewing thousands of pages of complex documentation, the FCA determined that available evidence did not warrant additional regulatory measures.
Drax imports millions of tonnes of wood pellets annually from across the Atlantic to generate electricity, asserting that its biomass originates from sustainably managed forests. The company’s sustainability positioning faced scrutiny following a 2022 BBC Panorama investigation that documented the harvesting of mature Canadian forests for pellet production. Subsequently, the energy watchdog Ofgem determined in 2024 that Drax had failed to implement adequate data governance and control systems when reporting historical wood sourcing from Canada, leading to a £25m payment to a redress scheme. Ofgem found the breach was technical rather than deliberate and located no evidence that sourced biomass was unsustainable or that the company improperly claimed renewable energy subsidies.
Forest experts reported last year that Drax likely continued sourcing wood from ecologically significant Canadian forests into the previous summer. The company subsequently announced plans to reduce Canadian wood pellet consumption and eliminate British Columbia sourcing within the following year. As a FTSE 250-listed company, Drax has received substantial government subsidies for renewable energy generation. In 2025, the company received £999m for producing approximately 4.5% of Great Britain’s electricity supply, according to climate analysis organization Ember.
The government has responded by reducing the company’s subsidies beginning in 2027 and mandating 100% sustainable wood sourcing, signaling that the power plant would assume a diminished role in future energy provision. Scientists and environmental advocates have maintained ongoing concerns that wood pellet burning, irrespective of sourcing, may not represent a sustainable practice and could contribute to rising carbon emissions. Drax’s chief executive stated the company valued regulatory compliance and had collaborated with the FCA throughout the investigation process, expressing satisfaction with the closure determination.
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