United Kingdom Hands Billions More in Subsidies to Drax for Tree-Burning Bioenergy

The U.K. government has announced that it will continue subsidizing Drax’s large bioenergy power stations beyond 2027, when current subsidies are scheduled to expire. However, the government is limiting the role of Drax to less than half of today’s production levels. This is a step in the right direction but still a bitter blow for those who care about forests and the climate. The government is also claiming that new sustainability standards will help. But they do nothing to address the fundamental issue: Cutting down and burning trees provide no climate benefits whatsoever.

Drax will still get hundreds of millions of pounds in subsidies—the price that the government is guaranteeing them is far higher than what’s paid to wind or solar power companies for truly low-carbon energy. It’s also higher than what the government has paid Drax in the past. It will be paid well: £154 ($190) per megawatt hour in today’s prices. Let’s not forget that in 2023, Drax earned around £500 million (approximately $620 million) in subsidies, and in 2024, it paid £300 million (approximately $370 million) in dividends to shareholders. But a new “clawback” mechanism will mean the government can take back a large share if Drax generates excess profits while also taking subsidies from the public.

This announcement came out of the government consultation in February 2024 on extending subsidies, during which NRDC and our partners submitted technical comments and rallied opposition. 

Bioenergy power stations like Drax burn wood pellets from forests in the United States, Canada, Estonia, Latvia, and other countries. And they spew millions of tonnes of carbon dioxide into the atmosphere, emitting more carbon than coal at the smokestack.

But companies like Drax claim they are carbon-neutral because one day, trees will regrow and “make up” for the damage. This sketchy offsetting has enabled countries like the U.K. to provide the industry with billions of bill payer pounds intended for true renewables like wind and solar. All of this makes biomass energy the worst environmental scam going. 

The good news is that opposition to industrial-scale bioenergy—in the U.K. and elsewhere—has grown immensely and has never been stronger than it is today. So many are opposed to bioenergy subsidies, from scientists and environmental and health experts to U.K. politicians and former energy ministers and advisors to former prime ministers, who,  after leaving office, are revealing that they never supported bioenergy subsidies. 

Twelve years ago, bioenergy was a relatively new U.K. energy technology. Now, more than a decade later, tens of millions of tonnes of trees have been burned, and the U.K. has already given Drax around £7 billion ($8.7 billion)—money that could have gone to actual energy solutions like genuine renewables and energy efficiency. 

Here are five reasons the U.K. government’s decision to give the biomass industry more money makes no sense: 

1. Bioenergy will make energy bills higher. Bioenergy is the most expensive energy technology and actually increases energy bills, unlike wind and solar, which reduce them. If the fabled bioenergy with carbon capture and storage (BECCS) ever materializes, the government’s own analysis shows it would increase the U.K. public’s bills much, much more. Like imported fossil fuels, imported wood makes the U.K. dependent on global markets and other countries for its electricity. We are price-takers, not pricemakers, when it comes to the millions of tonnes of wood fuel we import. This is bad for the public, which pays the price, and it puts our energy security at risk.

2. We don’t need bioenergy for power production or net zero. The U.K. has always asserted that it needs bioenergy to ensure the country’s power supply and meet net zero goals. But think tank E3G recently showed that it actually doesn’t. In other words, the U.K. can decarbonize the electricity sector by 2030 without Drax. Similarly, energy think tank Ember showed that the U.K. does not need large bioenergy power stations to meet its 2030 electricity goals. And a recent report by World Wildlife Fund and the Royal Society for the Protection of Birds demonstrated that the U.K. could achieve its 2050 net zero goal without BECCS.

3. Bioenergy worsens climate change and undermines the U.K.’s net zero goals. Drax is the U.K.’s number one polluter! That’s because bioenergy—which emits more carbon than coal—only worsens climate change, even with the addition of carbon capture technology (which doesn’t, and likely won’t ever, exist). Any captured and buried carbon is more than outweighed by the impact on forests and their ability to absorb carbon, as shown by two separate studies late last year. It takes decades for slowly regrowing trees to gradually offset this spike in carbon dioxide, by which time more trees would have been chopped down and burned.

4. Bioenergy destroys nature. In the United States, logging for wood pellets occurs in the nation’s only globally designated biodiversity hot spot, an area chock-full of imperiled species. In Canada, Drax’s own leaked emails show the company logs from some of the world’s oldest forests; massive carbon sinks that provide habitat for thousands of bird species. And in Estonia, 2022 investigations found that wood pellets were sourced from areas containing habitat for rare and imperiled species, which are protected under both Estonian and European Union laws. Amid a biodiversity crisis, with millions of species expected to go extinct—many within decades—this is insanity.

5. Bioenergy harms people’s health. In the U.S. Southeast, where most of the U.K. wood pellets come from, pellet mills emit hazardous air pollutants, like particulate matter, that cause cancer and other serious health impacts. This harms the surrounding communities, the vast majority of which are marginalized communities of color. In 2024, impacted community members from some of these areas spoke about the impacts on their health and communities. Dr. Krystal Martin said, “The last time I visited the community, I saw two small children….They were playing right there as the dust was flying.” Katherine Egland, chair of Environmental & Climate Justice at the NAACP, said, “This is environmental racism, plain and simple, that they are engaging in. These are the same communities in the southeast U.S. that supplied the cotton that was fuelled by slavery.”

6. Bioenergy companies have shown they cannot be trusted. Whether it’s turning off their generation to avoid paying back subsidies (showing that when the chips are down, they prioritise profit over power generation), providing faulty environmental data and being fined by the U.K.’s energy watchdog, secretly discussing logging ancient forests in Canada, or breaching environmental permits in the U.S. Southeast thousands of times, bioenergy companies have shown they have no desire to clean up their act. They don’t deserve billions more of the U.K. public’s hard-earned money—they can’t be trusted with it.

The only glimmers of hope are that the U.K. government has more than halved Drax’s power generation in today’s announcement and provided a finite timeline for the subsidies (from 2027 to 2031) instead of choosing some of the completely unrestrained options it laid out in its consultation in February 2024. Instead of running all the time, Drax will be limited to a 27 percent load factor, only being allowed to run at times when the electricity grid really needs it. Further, the government has shifted its tone on BECCS, saying it might not even happen and that it’s extending Drax for power generation reasons—not, as previously stated, to give Drax more time to develop carbon capture technology. This is important as it weakens the long-term case for continuing bioenergy once energy storage and other renewables have grown in scale. 

It’s clear the government could no longer ignore not just the scandal surrounding bioenergy companies but the fundamental flaws with this technology—an expensive, environmentally destructive energy source that will never pay for itself (without subsidies) or provide real climate benefit.