UK Extends Biomass Energy Agreement With Drax but Reduces Subsidies

The United Kingdom and Drax have agreed on a new deal that will halve the energy producer’s subsidies over 2027–31, while ensuring the group uses more sustainable sources of woody biomass, Reuters reported (2-10-25).

Drax is the UK’s largest renewable power generator. With the help of government subsidies that run until 2027, it has converted four former coal plants to use biomass to provide around 6% of the country’s electricity.

Following a consultation on extending the subsidies, the government said it “cannot allow Drax to operate in the way it has done before or with the level of subsidy it received in the past.”

Under the new agreement, the government said Drax should increase the proportion of woody biomass that comes from sustainable sources from 70% to 100%. Material sourced from primary forests and old growth forests will be excluded from subsidies and Drax will be fined if it does not meet the criteria, the government added.

Drax said it already meets the criteria of using biomass from 100% sustainable sources. The company says it only uses wood residuals or byproducts from trees primarily used for lumber, adding that demand for wood from sustainably managed forests can help to increase forest growth.