The Financial Conduct Authority concluded its nearly 10-month investigation into Drax, the operator of a power plant in Selby, North Yorkshire, determining there was no basis for regulatory action. The regulator examined thousands of pages of documentation related to the company’s biomass fuel sourcing and its disclosures to shareholders during the period spanning 2021 through 2023.
Drax generates electricity by burning millions of tonnes of wood pellets imported annually from across the Atlantic, with the company maintaining that its biomass originates from sustainably managed forests. The investigation was initiated following a BBC documentary in 2022 that documented the harvesting of mature Canadian forests for pellet production. Subsequently, the energy regulator Ofgem determined in 2024 that Drax had inadequate governance structures for tracking wood sourcing from Canada, leading to a £25m payment into a redress scheme. Ofgem found the issue was technical rather than intentional and uncovered no evidence that sourced biomass was unsustainable or that renewable energy subsidies were improperly claimed.
Forest experts indicated last year that Drax likely continued sourcing wood from ecologically significant Canadian forests into the previous summer. The company later announced plans to reduce Canadian pellet consumption and eliminate sourcing from British Columbia within the following year. As an FTSE 250 company, Drax has received billions in government renewable energy support, including £999m during 2025 for contributing approximately 4.5% of Great Britain’s electricity generation.
Critics and scientists have contested whether wood pellet burning constitutes a sustainable practice, regardless of origin. The government responded by reducing Drax’s subsidies by half beginning in 2027 and mandating the use of entirely sustainable wood, signaling the facility would assume a diminished role in the nation’s energy infrastructure going forward.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI