Financial Conduct Authority launches Drax fuel inquiry
The owner of Britain’s biggest ‘renewable’ power station is being investigated by the City watchdog following claims of greenwashing
Drax shares fell as much as 12.4 percent in early trading after it told investors on Thursday that the Financial Conduct Authority (FCA) had launched an inquiry relating to the company’s biomass fuel.
The investigation will examine “certain historical statements regarding Drax’s biomass sourcing” made between January 2022 and March 2024, as well as its annual reports for 2021, 2022 and 2023.
It comes after the ‘renewable’ energy company has received billions of pounds in taxpayer subsidies to support the burning of wood pellets at the UK’s biggest power plant in North Yorkshire.
Ed Miliband, the Energy Secretary, agreed in February to hand over an estimated £2bn in support for the site in Selby from 2027 to 2031. However, the taxpayer support has drawn criticism owing to the environmental impact of wood-burning plants.
While technically classed as ‘sustainable’, biomass still generates immediate emissions and has been blamed for fuelling deforestation. Drax has previously been accused of cutting down forests in North America to fuel its British plant with wood chips.
The company has previously said all of its wood is sourced ‘sustainably’.
The FCA’s investigation comes after Rowaa Ahmar, a Drax employee, was sacked after raising concerns about greenwashing.
She was employed by the company in 2022, when BBC Panorama released a documentary alleging that the company used wood from healthy forests in Canada instead of waste wood.
Ms Ahmar claimed she had been dismissed after raising concerns with senior figures that Drax had covered up its use of unsustainable wood.
An employment tribunal in London was told that after the Panorama programme, Drax had commissioned auditing giant KPMG to investigate the sustainability of its wood.
The tribunal heard that Ms Ahmar was told not to pass on to senior managers the interim findings of a report, which her lawyers claim found the company did use unsustainable wood and had misreported data to the regulator Ofgem.
However, she later raised concerns with Brett Gladden, the Drax company secretary. She also raised concerns with senior managers on several occasions, the tribunal was told, including claims of an internal cover-up.
She also accused Drax of inaccuracies in its communications with the Government, Ofgem and the public. She reached a settlement with the FTSE 250 energy company over her employment tribunal claim in March.
Drax said it “will cooperate with the FCA as part of their investigation”.
See more here telegraph.co.uk
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Header image: BBC
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