Drax cleared after investigation into sourcing of wood pellets | Drax
The city watchdog has closed an investigation into electricity generator Drax after an almost 10-month investigation into the supply of wood pellets for the biomass station.
The Financial Conduct Authority said it had “reviewed thousands of pages” but “found no evidence to justify further action”.
The regulator began investigating Drax, which operates the power station that bears its name in Selby, North Yorkshire, last year over concerns that it had made misleading statements to the market about the origins of its biomass fuel.
Drax, which operates the UK’s largest biomass power station, imports millions of tonnes of wood pellets from across the Atlantic each year and burns them to generate electricity.
It argues that biomass provides reliable renewable electricity and could help the UK move away from fossil fuels. It has received billions of pounds in government subsidies to help meet national carbon reduction targets. It received £999 million for generating around 4.5% of Great Britain’s electricity from its own plant in 2025, according to climate think tank Ember.
But campaigners and scientists insist that the pellets they burn are not from sustainable sources and could increase carbon emissions.
In 2024, Drax agreed to pay £25 million into a compensation scheme after energy watchdog Ofgem found it had “failed to put in place adequate data management and controls” when reporting details of the type of wood historically sourced from Canada.
The regulator found at the time that there was no evidence to suggest the breach was intentional and instead said it was “technical in nature”. Additionally, no evidence was found that the resulting biomass was unsustainable or that Drax had falsely claimed renewable energy subsidies.
The FCA said on Thursday: “Our focus was on areas within our remit, in particular whether Drax’s annual reports and accounts for 2021 to 2023 contained misleading statements or left out important information investors need to know.
“Accurate reporting is vital to the integrity of our markets and to enable investors to make informed decisions. We take this where the evidence supports proportionate action. If it does not, we close cases as quickly as possible.”
Drax CEO Will Gardiner said in a statement that the company understood the importance of complying with regulatory obligations and was “working constructively with the FCA throughout this investigation.”
“We are pleased to see that the investigation was closed without further action,” he added.
Shares in London-listed Drax rose 1.2% in early trading on Thursday. The stock fell sharply when the FCA investigation began last August.
