Energy company Drax received £869 million in public subsidies in 2024 for burning imported forest biomass, according to a new analysis by Ember. This marks the second-highest subsidy amount in the company’s history and has contributed to record profits, raising concerns over the long-term sustainability of biomass as an energy source.
The majority of Drax’s subsidy — £652.6 million — came from the Renewables Obligation (RO) scheme, while an additional £216 million was provided through the Contracts for Difference (CfD) scheme. The total subsidies received in 2024 were £268 million higher than in 2023, reflecting a rebound in earnings following the energy crisis. These payments equate to more than £2 million per day, adding an estimated £10 per year to the average UK household’s energy bill.
Record Profits Amid Rising Concerns
Drax’s 2024 earnings surpassed £1.06 billion, making it the company’s most profitable year in 35 years. However, critics argue that the subsidies are driving up energy costs while offering no guaranteed reduction in carbon emissions.
“Drax’s record-breaking earnings are coming at the expense of the British taxpayer, and all for something that is polluting, costly, and increases import dependence,” said Frankie Mayo, Senior Analyst at Ember. “The UK must commit to a long-term phase-out of biomass burning.”
While biomass is classified as carbon neutral under UK law, a growing body of scientific evidence challenges this assumption. The European Academies Sciences Advisory Council (EASAC) has stated that using woody biomass for energy production is not effective in mitigating climate change and could even increase climate risks.
Biomass Phasedown to Begin in 2027
In response to growing concerns, the UK government has announced that the current subsidy scheme for Drax will end in 2027. A new Contracts for Difference scheme will be introduced for all four of Drax’s biomass units, reducing both subsidies and overall generation by around half.
This transition marks the beginning of a phased reduction in biomass reliance, with Drax’s role in UK energy generation expected to decline further as cleaner power sources are developed through 2030 and beyond.
GreentechLead.com News Desk