Drax found that it was “highly likely” to have burnt wood sourced from old forest areas in Canada deemed to be environmentally important, according to internal emails, as the UK’s biggest biomass power station operator battled to maintain its green credentials.
The wood received by pellet plants owned by Drax from its suppliers in British Columbia was traced to areas local authorities classed as ecologically significant, as well as “high-risk” private land, according to the emails seen by the Financial Times.
While the material was not illegal to use, many environmental experts said old-growth woods and forests should be protected given their ecological benefits, including absorbing and storing atmospheric carbon for centuries.
Drax is a key part of the UK’s power infrastructure and efforts to reduce greenhouse gas emissions, supplying 5 per cent of the UK’s electricity from its Yorkshire power plant that it has converted from running on coal to biomass.
The company received government subsidies of just under £1bn last year, or an estimated 13 per cent of Drax’s £7.5bn power generation revenues, according to research platform Visible Alpha. It is now seeking further taxpayer funding for when its current deal runs out.
A lengthy investigation by Ofgem into its reporting concluded recently after the UK regulator cleared it of a deliberate breach, and Drax agreed to pay a penalty of £25mn into a voluntary scheme for failing to record adequate data about the wood it imported to burn from April 2021 to March 2022.
In the internal emails exchanged in November 2022, Drax executives discussed how the source of the wood ought to be classified.
“Drax Canada does take material from forests that are native species that has [sic] not been previously harvested,” but this did not necessarily mean those areas should be reported as primary forest, the emails said.
“That material from forests of native species that have not been previously harvested may come to Drax Power Station as processing residues,” one email said. This supply would have to “comply with the Land Criteria and the requirement for reporting primary forest material”, it added.
Ultimately, Drax reported its wood from Canada in 2021 to 2022 as “naturally regenerated forest”.
People familiar with the Ofgem investigation said Drax had not provided sufficient evidence to back up this claim. The Ofgem inquiry followed an investigation by the BBC’s Panorama in October 2022 about its activities in Canada.
Karen Price, an independent ecologist who was part of a panel set up by the British Columbian government to identify sensitive areas for protection, said it was vital the trees be preserved.
“These forests are at risk and they are critical to help us lessen the impact of the climate and biodiversity crises,” said Price.
Drax said it took the sustainability of the biomass it used “extremely seriously” and any suggestion of non-compliance was investigated rigorously. It noted that it had no ownership of the forests, harvesting or sawmills.
“The internal conversations reflect a small part of the extensive review held within Drax as a part of our response to Panorama in October 2022 and are taken out of their wider context,” it said.
“Our internal emails reflect the open discourse and debate we have, which is critical for our communications to be as accurate and transparent as possible.”
KPMG, which examined Drax’s reporting to the regulator, did not find any evidence of misreporting, according to Drax’s annual report for 2023. KPMG declined to comment.
The emails show that the internal Drax review found that some of the wood sent to its Canadian mills had been sourced from old growth areas, including those that a panel of experts commissioned by the BC authorities recommended should be protected from harvesting. Some also came from “high-risk” private land that lacked “publicly available traceability information”.
Given those findings, “some of the [old growth area material] is highly likely to have come to Drax power station,” and to have gone to Lynemouth power station in northern England, which Drax supplies, they said.
The Lynemouth station, on the Northumberland coastline, is owned by a company controlled by Czech entrepreneur Daniel Křetínský, which says it generates enough clean power to supply about 450,000 homes.
However, some of the pellets produced by Drax Canada that it supplied to Lynemouth were reported to the authorities by Lynemouth “as not sustainable” under the UK rules, according to the emails.
Those rules stipulate that at least 70 per cent of a power generator’s woody biomass consignment must be classified as sustainable. Lynemouth declined to comment.
Ofgem’s probe chose to focus on the “profiling” data about the wood’s characteristics and said the misreported data had been “technical in nature”. It did not find evidence that Drax biomass was unsustainable.
But the regulator ordered the company to resubmit the data required about the wood it sourced from Canada between April 2021 and March 2022 and to carry out a full review of its reporting globally. Ofgem has also written to other biomass power producers, according to people familiar with the matter.
The biomass industry maintains that responsibly sourced wood pellets are a sustainable and responsible alternative to fossil fuels. However, a range of scientists, politicians and campaigners have raised concerns about the dangers that the growing industry may pose to natural or old forests.
“People who support biomass often say they are really concerned about climate change, but may be unaware of the harm caused by the sector,” said Tegan Hansen, senior forest campaigner at Stand.earth.
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