After Shoveling Billions To Drax For "Sustainable" Generation, Billions For "Carbon Capture" Also Under Scrutiny

The financial watchdog’s decision to investigate the sustainability claims made by the owners of the Drax power plant came as little surprise to Britain’s energy industry. For years the former coal generator has faced a torrent of criticism for collecting billions of pounds in renewable energy subsidies in exchange for burning wood pellets – shipped thousands of miles from North America – at its vast power station in North Yorkshire. Drax faces allegations that it may have misled investors and the government over the sustainability of its wood sources. In its investigation, the Financial Conduct Authority will in effect follow in the footsteps of the industry regulator, Ofgem, as well as the National Audit Office and the public accounts committee in scrutinising whether the company’s green claims stack up.

Drax is a relic of Britain’s coal-rich industrial past. Built after the 1960s discovery of the Selby coalfield and opened in 1974, it burned coal for almost 50 years. It expanded to become Britain’s biggest power plant, generating enough electricity to power about 4m homes from almost 4 gigawatts of capacity. But as coal fell out of favour and Britain began turning to renewable power, Drax started converting its coal-burning units to run on biomass in 2013, aided by a stream of subsidies.

The latest controversy circling the government’s support for biomass is expected to raise fresh questions about the decision to extend its subsidies by almost £2bn by the end of the decade. The government has also granted permission for Drax to fit carbon capture technology to its biomass plant, in a project that could cost billpayers an estimated £40bn.

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The concerns came to a head in late 2022 when a BBC documentary revealed that a company owned by Drax was not relying solely on waste wood for its biomass pellets. It showed that a Canadian subsidiary was involved in the logging of natural woodland to produce biomass pellets, despite the company’s claim to avoid any damage to “carbon-locking” forests. In the aftermath of the documentary, one of the company’s top lobbyists, Rowaa Ahmar, claimed to have warned senior executives that the company was “misleading the public, government and its regulator” about its sustainability credentials. Ahmar made the allegations as part of an employment tribunal in which she claimed to have been unfairly dismissed for blowing the whistle on the company’s handling of the crisis. Drax denied her claims and reached a settlement with Ahmar a week after the case opened.

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https://www.theguardian.com/business/2025/aug/28/drax-inquiry-fca-questions-billions-subsidies