Home / Environment / Drax Burns £1bn in Subsidies for Forest Fuel
Drax Burns £1bn in Subsidies for Forest Fuel
16 Apr
Summary
- Drax received nearly £1bn in subsidies for burning wood in 2025.
- Total subsidies to Drax since 2012 exceed £8.7bn.
- Concerns exist over wood pellet sourcing from potentially unsustainable forests.
In 2025, Drax's biomass plant in North Yorkshire received close to £1 billion in subsidies for electricity generation. This expenditure, amounting to about £2.7 million daily, means Drax has claimed nearly £8.7 billion in renewable energy subsidies since 2012. These payments have drawn scrutiny due to ongoing accusations that the wood pellets used are not sustainably sourced, potentially increasing carbon emissions.
Experts and campaigners have raised concerns that Drax may be burning trees from older, valuable forests, particularly in Canada. Internal communications revealed senior staff had expressed unease regarding public statements about pellet sustainability. Following these disclosures, a group of parliamentarians urged the energy secretary to halt subsidies pending an investigation.
Drax stated that the industry regulator, Ofgem, found no evidence of deliberate misreporting but did identify inadequate data governance, leading to a £25 million compensation payment. The government is set to halve subsidies from 2027 and mandate a switch to 100% sustainable biomass sources, with potential penalties for non-compliance.
Drax is also re-evaluating its biomass pellet production business, intending to cease using wood from British Columbia before the new subsidy regime. The company maintains its plant is vital for energy security and cost savings compared to gas or nuclear alternatives.
