FCA CLOSES PROBE INTO DRAX BIOMASS SOURCING CLAIMS

The Financial Conduct Authority has closed an investigation into Drax without taking action against the energy company. The FCA confirmed the closure on Thursday, ending a probe launched in August 2023. The investigation followed whistleblower allegations that Drax had misled the market regarding the sustainability of wood pellets sourced from Canada. The regulator examined the company's statements on biomass sourcing and compliance of its annual reports for 2021, 2022 and 2023 against listing, disclosure and transparency rules.

The FCA reviewed thousands of pages of material and interviewed company representatives during the investigation, which covered January 2022 to March 2024. The regulator stated it did not find evidence justifying further action. Drax operates the UK's largest power station in Yorkshire and receives Government subsidies for burning biomass to generate power, classified as renewable energy. The company has faced long-standing accusations of sourcing pellets from environmentally important forests, though Drax maintains the wood is sustainably and legally harvested. Rowaa Ahmar, Drax's former head of public affairs and policy, had raised concerns about misleading biomass sourcing claims in an unfair dismissal claim; Drax and Ms Ahmar reached a settlement.

Will Gardiner, chief executive of Drax, stated the company recognised the importance of regulatory compliance and had worked constructively with the FCA throughout the investigation. Gardiner said the company was pleased the investigation had closed without action being taken. The decision comes weeks after the Government confirmed it would continue providing new subsidies for Drax's North Yorkshire facility beyond existing arrangements.