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Drax Faces UK FCA Probe Over Biomass Sourcing Claims
ByAinvest
Thursday, Aug 28, 2025 2:39 am ET1min read
Drax Group Plc is facing a probe by the UK's Financial Conduct Authority into statements it made about its biomass sourcing in annual reports between 2021 and 2023. The investigation, which covers January 2022 to March 2024, focuses on the company's compliance with regulations. Drax will cooperate with the FCA and declined to comment further. The watchdog confirmed the probe without providing additional details. The investigation comes amid criticism over the sustainability of wood sourced from North America for use in Drax's power plants.
Drax Group Plc is under scrutiny by the UK's Financial Conduct Authority (FCA) following allegations of misreporting in its biomass sourcing statements. The probe, which covers the period from January 2022 to March 2024, focuses on the company's annual reports for 2021, 2022, and 2023. Drax has confirmed its cooperation with the FCA but declined further comment. The watchdog has not provided additional details about the investigation [1].The investigation comes amidst growing concerns about the sustainability of wood Drax sources from North America for its power plants. A BBC investigation in 2022 alleged that the company was cutting down "environmentally important" forests to produce wood pellets for electricity generation in the UK. These allegations have led to increased scrutiny and criticism of the company's sourcing practices [2].
In response to these concerns, the UK government extended Drax's subsidies but increased the sustainability standards required for the company to qualify. The probe by the FCA aims to ensure that Drax's statements regarding its biomass sourcing are accurate and compliant with regulations.
Drax's cooperation with the FCA indicates a commitment to addressing the concerns raised. However, the company's silence on the matter suggests a cautious approach to avoid speculation. Investors and financial professionals should monitor the developments closely, as the outcome of the probe could have significant implications for the company's reputation and regulatory compliance.
References:
[1] https://www.bloomberg.com/news/articles/2025-08-28/drax-faces-uk-probe-over-its-biomass-sourcing-statements
[2] https://www.marketwatch.com/story/drax-probed-by-u-k-regulator-over-biomass-sourcing-reporting-f4ee0314
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