Financial Conduct Authority launches inquiry into Drax’s biomass ‘sourcing’

The owner of Britain’s biggest renewable power station is being investigated by the City watchdog following claims of greenwashing.

The Telegraph has the story.

Drax shares fell as much as 12.4pc in early trading after it told investors on Thursday that the Financial Conduct Authority (FCA) had launched an inquiry relating to the company’s biomass fuel.

The investigation will examine “certain historical statements regarding Drax’s biomass sourcing” made between January 2022 and March 2024, as well as its annual reports for 2021, 2022 and 2023.

It comes after the renewable energy company has received billions of pounds in taxpayer subsidies to support the burning of wood pellets at the UK’s biggest power plant in North Yorkshire.

Ed Miliband, the Energy Secretary, agreed in February to hand over an estimated £2bn in support for the site in Selby from 2027 to 2031.

However, the taxpayer support has drawn criticism owing to the environmental impact of wood-burning plants.

While technically classed as sustainable, biomass still generates immediate emissions and has been blamed for fuelling deforestation.

Drax has previously been accused of cutting down forests in North America to fuel its British plant with wood chips. The company has previously said all of its wood is sourced sustainably.

The FCA’s investigation comes after Rowaa Ahmar, a Drax employee, was sacked after raising concerns about greenwashing.

Read the full story here.