Despite receiving significant public subsidies, Drax remains the UK's largest emitter of CO2, with its power being more expensive and polluting than gas and coal.

Drax asserts it mainly uses sawdust, residue wood, or dead trees, claiming its harvesting reduces wildfire risks, countering environmental criticisms.

Since converting to biomass, Drax has earned over £7 billion from subsidies and relies heavily on imported wood, mainly from North America, which it claims is certified under the Sustainable Biomass Program.

Following the announcement of the FCA investigation, Drax’s shares dropped approximately 8-10% in London trading, reflecting market concerns.

Energy giant Drax is currently under investigation by the UK's Financial Conduct Authority over its biomass sourcing practices and the accuracy of its annual reports from 2021 to 2023, covering over two years of scrutiny.

A whistleblower, Rowaa Ahmar, accused Drax of misleading regulators and the public about its sustainability efforts, which led to her dismissal and a subsequent settlement.

Last year, Drax faced a £25 million fine for providing false data related to government subsidies, which are worth over £10 billion for the period from 2012 to 2027.

Despite ongoing investigations, the UK government has confirmed it will continue subsidizing Drax’s North Yorkshire power station beyond 2027, where subsidies are set to halve and include profit-sharing mechanisms to benefit consumers.

Drax claims its emissions will decline as it reduces operational hours and increases onsite carbon capture, especially amid subsidy cuts.

Originally built as a coal-fired plant in 1974, Drax transitioned to biomass in 2013, receiving substantial subsidies to support this shift.

The company relies heavily on government subsidies for its biomass operations, which are controversial due to allegations of sourcing wood from ecologically sensitive forests and environmental groups calling for a shift to wind and solar energy.

From 2027 to 2031, a new UK government scheme will require Drax to source 100% of its pellets from certified sustainable sources to maintain subsidies, up from the current 70%.

In early 2024, government approval was granted for carbon capture at Drax’s site, but questions remain over whether subsidies have been properly awarded, given ongoing allegations of sourcing timber from protected forests.