After receiving 58 billion yuan in subsidies, the UK's largest biomass power plant was accused of "greenwashing"—what happened?

Source: Getty Images

 

Abstract:

Why is the UK's largest renewable energy power station so controversial?

 

Britain's largest biomass power plant, which recently ran into fresh trouble after claiming that burning wood to generate electricity is "sustainable," is once again facing challenges.

 

On August 28, local time, UK biomass power generator Drax Group Plc announced that the UK Financial Conduct Authority (FCA) has launched an investigation into certain historical statements made by the company regarding its biomass procurement practices.

 

FCA will focus on reviewing a series of historical statements made by Drax Group between January 2022 and March 2024 regarding the "source of biomass fuel," as well as whether the company’s 2021–2023 annual reports complied with listing rules, disclosure guidelines, and transparency regulations. Following the announcement, Drax’s share price plunged as much as 12.4% in early trading.

 

Drax Group's Drax Power Station, located in North Yorkshire, was once a coal-fired power plant but is now hailed as the UK's largest single-site renewable energy facility. It generates enough electricity to meet the needs of 5 million households—accounting for roughly 6% of the nation's total power consumption. The company imports wood pellets from North America, burns them to produce electricity, and proudly describes its operations as "sustainable."

 

The company noted in its recently released half-year financial report that, between April 2024 and March 2025, the Drax power station averaged 19% of the UK’s renewable electricity generation during peak periods of power demand. On certain days, this figure even surged to over 50%.

 

Since 2012, the UK government has provided Drax with over £6 billion (approximately RMB 57.881 billion) in subsidies. In February of this year, the UK’s Department for Energy Security and Net Zero (DESNZ) reached a new subsidy agreement with Drax, extending support for Drax’s “critical” bioenergy projects from 2027 to 2031.

 

According to the think tank Ember, Drax is expected to receive more than £10 billion in renewable energy subsidies between 2012 and 2027 under the current policy framework. Despite ongoing concerns that the sourcing of wood pellets is not always sustainable, the amount of subsidies continues to rise.

 

Caption: UK Launches Investigation into Drax's Biomass Procurement Disclosure Practices

Source: Reuters

 

Although biomass is technically classified as a sustainable energy source, it still results in direct carbon dioxide emissions. Drax has previously been accused of deforestation in North America to supply wood pellets for its UK plants.

 

The company previously stated that all of its timber comes from sustainable sources. It believes using wood chips as a biomass source can enable sustainable energy production, since trees absorb carbon dioxide as they grow. However, one analyst bluntly pointed out that electricity bill payers are "essentially footing the bill for higher carbon emissions in the atmosphere."

 

Over the years, Drax has faced numerous criticisms and investigations due to the sustainability of its biomass. Among these is a recent inquiry launched by Ofgem, the UK's independent energy regulator responsible for overseeing the gas and electricity markets.

 

In March 2025, Ofgem issued a statement providing further details about the Drax investigation and outlining how the reporting requirements under the UK Renewable Obligation (RO) apply.

 

On the one hand, Ofgem found no evidence indicating that Drax deliberately made false claims, nor did it discover that the company unfairly applied for subsidies under its 70% biomass "sustainable" plan as required.

 

On the other hand, Ofgem concluded that Drax "failed to meet its data collection obligations" between April 2021 and March 2022. Ultimately, the company voluntarily paid a fine of £25 million (approximately RMB 241 million), but this penalty pales in comparison to the more than £6 billion (about RMB 57.881 billion) in subsidies it has received to date.

 

Caption: Drax Power Station's biomass comes from Canada

Source: Drax Group

 

The immediate trigger for this latest investigation stemmed from a whistleblower complaint by former employee Rowaa Ahmar. Following the dismissal of Drax's former employee Rowaa Ahmar, who raised concerns about greenwashing practices, the FCA launched an inquiry. Ahmar claimed she was fired because she had alerted her superiors to Drax's efforts to conceal its use of unsustainable timber.

 

Ahmar joined Drax in 2022, just as the BBC's "Panorama" program revealed the company was using wood from Canada's native forests instead of recycled timber. The BBC reported that the company has been using whole trees sourced from pristine and old-growth forests in British Columbia, Canada, without proper declaration. This logging practice directly violates the company’s sustainability standards as well as UK regulations.

 

Ahmar raised concerns with senior management, only to be asked to keep quiet about the interim results of the sustainability audit commissioned from KPMG. Ahmar stated that the report revealed the company had indeed been using unsustainable wood and misleadingly reporting data to energy regulator Ofgem. After multiple unsuccessful internal whistleblowing attempts, she was subsequently dismissed from her position, after which she filed for labor arbitration—and in March of this year, reached a settlement with Drax.

 

In addition to the issue of wood "sustainability," Drax's high emissions have also been a subject of intense controversy.

 

In fact, back in 2021, Sky News first revealed that Drax's Drax Power Station is the largest single source of emissions in the UK. Sky News, citing research from the think tank Ember, reports that if biomass emissions are factored in, this power plant ranks among the largest sources of both carbon dioxide and PM10 air pollution among all power stations in the EU—surpassing even some of Europe's most heavily polluting coal-fired plants.

 

Caption: 2021 EU Power Plant CO₂ Emissions Ranking

Source: Sky News, EUETS

 

Sky News noted at the time that in 2020, its coal emissions totaled 1.5 million tons, while biomass emissions—referred to by Drax as "bio-sequestered carbon"—amounted to 13.3 million tons. Even without coal emissions, its plant in Selby would still remain the largest single-point source of carbon dioxide in the UK, as well as the fourth-largest such source in the European Union.

 

However, in reality, these carbon dioxide emissions—amounting to tens of millions of tons—are not counted toward the UK’s total emissions. This is because the UK excludes these biomass-related emissions from its overall tally, just like the EU. The UK believes that bioenergy can achieve immediate carbon neutrality, as it assumes that regenerating forests will once again absorb the emitted carbon. Similarly, the EU ETS also concludes that biomass achieves carbon neutrality when its emissions are evaluated over the entire lifecycle of combustion.

 

Phil MacDonald, the then-CEO of the Climate and Energy Think Tank, commented that scientific research has cast doubt on this carbon-neutral theory. In fact, biomass does indeed carry the "risk" of leading to "substantial emissions."

 

Critics point out that, Forests take decades to regrow and once again absorb all the carbon, which means that as the world strives to cut emissions by 2050, the CO2 emissions driving global warming continue to accumulate in the atmosphere.

 

A 2018 study estimated that forests would take 40 to 100 years—or even longer—to reabsorb the carbon emissions produced by burning wood pellets, as forests are particularly vulnerable to threats such as disease and wildfires.

 

The lead author of the paper, John Sterman, a professor of management at MIT, warns that assuming biofuels are carbon neutral could actually "exacerbate the irreversible impacts of climate change before any benefits are realized." His study concludes that, due to wood's lower efficiency, it emits more CO₂ per unit of electricity generated than coal does.

 

In January 2021, the European Academies' Science Advisory Council (EASAC) also stated that biomass technologies "cannot effectively mitigate climate change," In February, more than 500 scientists called on the European Union to revoke biomass's "carbon-neutral" status. The scientists wrote: "The urgency of the climate crisis demands that any renewable energy technology must swiftly succeed in reducing atmospheric CO2 levels—yet this particular technology fails to effectively mitigate climate change and may even heighten the risks of dangerous climate shifts."

 

Caption: EASAC claims biomass technology "cannot effectively mitigate climate change."

Source: EASAC

 

Drax claims that its emissions have dropped by 90% since replacing coal with sustainable biomass. A Drax spokesperson previously stated that Ember's interpretation of carbon emission data from its biomass plants "completely contradicts the findings of leading UN IPCC climate scientists, who emphasize the critical role sustainable biomass plays in helping the world meet its global climate goals."

 

However, the think tank Ember has been continuously tracking the emissions from Drax's biomass power plant. According to Ember's latest report this July, due to the closure of coal and steel plants, Drax Power Station is now steadily becoming the largest source of carbon emissions in the UK, followed by the Port Talbot steelworks and the Pembroke gas-fired power station.

 

In 2024, Drax Power Station generated 15 terawatt-hours of electricity by burning 7.6 million tons of wood, with 99% of the wood coming from imports. The high carbon content of the wood, combined with its intense combustion rate, led to a 16% increase in Drax's emissions, once again making it the largest single source of emissions in the UK. This widening gap has further extended the station's lead over the second-largest emitter, whose emissions are now even lower than the total output of the six largest gas-fired power plants combined.

 

Think tank Ember points out that, despite its high emissions, the UK's carbon budget currently classifies biomass power generation as carbon-neutral, meaning it qualifies for subsidies specifically allocated to renewable energy. This, however, allows Drax Power Station to receive approximately £2 million (about RMB 19.2937 million) in public subsidies daily—while simultaneously contributing alarmingly high levels of direct emissions.

 

Caption: Ranking of the Largest Emission Sources in the UK, 2022–2024

Source: Ember

 

In February 2025, the UK government announced its decision to cut subsidies for biomass power plants by about half over a four-year period, starting after the current scheme ends in April 2027. Under these new terms, Drax Power Station will generate roughly half of its current output, providing less than 2% of the UK’s projected electricity supply by 2030.

 

However, Ember points out that although subsidies for electricity generation could drop by half starting in 2027, Drax's emissions—more than three times those of Pembroke Gas Power Station, the second-largest emitter—may ensure that Drax remains the biggest polluter by 2030, thanks to public subsidies for biomass.

 

Meanwhile, the future of bioenergy with carbon capture and storage (BECCS) remains uncertain. The UK government's overall plan to support carbon capture, known as the "CCUS Cluster Process," has been progressing slowly, and BECCS continues to be excluded. Neither Drax nor Lynemouth biomass power stations have yet been included in CCUS's "first-track" projects.

 

In the future, the controversy surrounding Drax Power Station's biomass sustainability and high carbon emissions is likely to persist.