Drax’s Record £999M Subsidy for Burning Trees: What’s Next?

Drax, the owner of a North Yorkshire power plant, has come under scrutiny for its record-breaking £999 million subsidy claim in 2025. This subsidy was for burning trees to generate electricity, a practice that has raised concerns among environmentalists and policymakers alike.

The company's biomass plant generated approximately 4.5% of Great Britain's electricity, costing each household £13 annually. This substantial subsidy was made possible due to increased power generation and, more significantly, rising payouts from a legacy renewables support scheme.

Since 2012, Drax has received a total of £8.7 billion in renewable energy subsidies. However, campaigners and scientists have persistently claimed that the wood pellets used are not sourced sustainably and may contribute to increased carbon emissions. These allegations have sparked concerns in Westminster, with MPs and peers calling for a halt to the subsidies while the financial watchdog investigates.

Drax's Canadian subsidiary has been at the center of the controversy, with claims that it uses old-growth forests for wood pellets. The company has denied these allegations, but court documents revealed internal concerns among senior staff members.

The government has taken action by halving the subsidies and implementing stricter sustainability requirements. Under a new contract, Drax must source 100% sustainable woody biomass, or face substantial penalties. This shift aims to address environmental concerns while ensuring a more sustainable energy future.

Drax is reviewing its Canadian biomass pellet production and has committed to stopping the burning of trees from British Columbia. The company argues that its power plant provides a cost-effective alternative to gas-fired plants, saving billions in the long run.