UK Watchdog Closes Probe Into Drax's Biomass Claims

The Financial Conduct Authority (FCA) has concluded its investigation into whether Drax, the owner of a major UK power station, made misleading environmental claims to shareholders regarding its biomass fuel. The probe, which lasted 10 months, involved a review of extensive documentation concerning the wood pellets used to generate electricity at the Drax complex in North Yorkshire.

Drax, formerly the UK's largest coal-fired power plant, imports millions of tons of wood pellets annually from Canada. The electricity generated from this biomass is classified as 'zero-emission' and constitutes approximately one-tenth of the United Kingdom's renewable electricity supply. Drax asserts that its biomass is sourced from sustainably managed forests, a claim that has enabled it to receive substantial taxpayer subsidies.

The company's assertions faced scrutiny following a 2022 BBC documentary that suggested mature forests in Canada were being felled to produce these wood pellets. The FCA's investigation focused on whether Drax's annual reports and accounts between 2021 and 2023 contained misleading information or omitted crucial details for investors concerning the origins of its biomass.

The watchdog's decision to drop the probe means no further action will be taken regarding these specific claims. The review examined thousands of pages of complex material as part of its assessment.