8 godzin temu
Energy giant Drax is under investigation by the Financial Conduct Authority over claims about its sourcing of wood for biomass pellets. The London-listed company faces scrutiny following whistleblower allegations made earlier this year.
The FCA probe covers more than two years of operations, from January 2022 to March 2024. The investigation will also examine whether Drax's annual reports from 2021, 2022 and 2023 complied with listing, disclosure and transparency rules.
Whistleblower claims spark probe
The investigation follows accusations made in March by Rowaa Ahmar, Drax's former head of public affairs and policy. She alleged the company had misled stakeholders over its sourcing of wood for biomass pellets as part of her unfair dismissal claim at an employment tribunal.
Drax denied her claims but the company said it will "co-operate with the FCA as part of their investigation". The firm and Ahmar reached a settlement just over a week after the tribunal case opened.
Government backs continued subsidies
Just weeks before the tribunal, the Government confirmed it would continue providing new subsidies for Drax's wood-burning power plant in Yorkshire after existing support ends in 2027. Ministers described the major power station, which produces around five per cent of the UK's electricity, as "important to delivering a secure, value-for-money power system".
The new arrangements will halve the subsidies paid to Drax. They include a windfall mechanism ensuring that 30 to 60 per cent of profits above expected limits will be returned to consumers.
Financial dependence and criticism
Drax would not be financially viable without the billions it has received in government subsidies for burning wood pellets, which are classified as renewable energy. Environmental groups and campaigners have long called for an end to all subsidies for burning wood from forests and energy crops in power stations.
Previous investigations by green groups have alleged that Drax used wood from environmentally important forests around the world. The company has previously said it is confident its biomass is sustainable and legally harvested.
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
