Drax Group's Biomass Sustainability Under Scrutiny
Drax Group accounts for about 6% of the UK’s electricity, largely produced at its biomass plant in Yorkshire. The UK mandates that Drax disclose details about its wood sourcing, specifying the geographical and forest types from which the wood originates.
The backbone of a net zero economy will be a zero-carbon power system.
Biomass, in the form of compressed wood pellets, is a low-carbon replacement for coal that can be used at power stations to generate renewable energy such as electricity and heat.
However, reports from the BBC suggest that Drax has been procuring whole trees from primary and old-growth forests in British Columbia, Canada, without proper disclosure. This practice appears to conflict with both the company’s sustainability standards and UK regulatory requirements.
The company says on its website:
“Our sustainability due diligence process is designed to ensure the biomass we use for generation at Drax Power Station is sustainable and compliant with relevant legislation. Woody biomass supplier compliance is evidenced by external certification schemes, alongside our internal assurance system and third-party audits commissioned by Drax.”
Controversies around Drax's wood sourcing
Controversy is not new to Drax, especially regarding its wood sourcing.
In 2024, Drax faced a hefty fine of £25m (US$31m) from Ofgem after an investigation that lasted 15 months. The inquiry unveiled that Drax had been inaccurately reporting the types of wood it burned. This revelation came despite the company having received £6bn (US$7.4bn) in green energy subsidies from the UK government.
“Drax Group, the UK’s largest renewable power generator, has been under scrutiny for misreporting biomass data and sourcing wood from ecologically significant forests in Canada,” Oonagh van den Berg, CEO and Founder of Compliance Consultancy and Compliance Education said on LinkedIn.
“This is not the first time and according to news reports Drax "...did not deny misreporting its sustainability data but said it is "focused on implementing the lessons learned"."
“Despite these controversies, Drax continues to receive substantial financial support:
- “Barclays Served as a key financier, participating in a US$369m sustainability-linked loan (SLL) to Drax in 2020.
- “RBC Joined a US$208m SLL for Drax in 2021.
- “J.P. Morgan Also involved in financing Drax’s operations.
“These SLLs are designed to incentivise sustainable practices, yet Drax’s environmental track record raises questions about their effectiveness.
“Notably, RBC recently exited the Net Zero Banking Alliance, suggesting a potential shift in its climate commitments.
“This situation prompts a critical examination of ESG policies in banking.
“Are financial institutions prioritising profits over genuine sustainability?
“Is “cash is king” still the prevailing mantra, even at the expense of environmental integrity?
“It’s imperative for banks to align their financing with authentic ESG commitments, ensuring that their support fosters genuine environmental stewardship rather than enabling greenwashing.”
Understanding Biomass Energy
Biomass is a form of renewable energy that involves burning organic materials like wood and agricultural waste to generate power.
“Biomass is organic matter,” Drax says on its website. “In the case of bioenergy, it typically refers to agricultural by-products and residues, woody waste products, and crops and microbes that can be used for fuel.”
Modern biomass systems are touted to be cleaner and more efficient, substantially reducing emissions when compared to traditional fossil fuels.
“At Drax, our transition from coal to biomass has been guided by strict sustainability requirements, ensuring that the biomass we use is renewable and responsibly sourced,” says Will Gardiner, CEO of Drax Group.
Drax Group’s commitment to sustainability
In its pursuit of carbon neutrality by 2030, Drax is moving away from coal towards biomass.
The company's power station in North Yorkshire, once the largest coal-fired plant in Western Europe, now operates four biomass units. In 2022, these units generated 12.7TWh of electricity, evidencing a drastic 99% reduction in Scope 1 and 2 emissions since 2012.
Drax outlines its Biomass Sustainability Commitments focused on three core areas:
- Reducing CO₂ emissions
- Protecting the natural environment
- Supporting communities.
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