FCA closes investigation into Drax over biomass sourcing

Regulator launched inquiry amid concerns that firm made misleading statements about origins of wood pellets

The City watchdog has closed an investigation into the power generator Drax , after an almost 10-month review into the sourcing of wood pellets for its biomass power station.

The Financial Conduct Authority said it had “reviewed thousands of pages” but that it “did not find evidence that justified any further action”.

The regulator launched the investigation last year amid concerns that Drax, which operates its eponymous power plant in Selby, North Yorkshire, made misleading statements to the market about the origins of its biomass fuel.

Drax, which operates the biggest biomass power station in the UK, imports millions of tonnes of wood pellets from across the Atlantic every year and burns them to generate electricity.

It argues that this biomass provides reliable renewable electricity and can help the UK’s transition away from fossil fuel. It has received billions of pounds in government subsidies to help hit national carbon-cutting goals. In 2025 alone, it received £999m in for generating about 4.5% of Great Britain’s electricity from its plant , according to the climate thinktank Ember.

However, there have been persistent claims from campaigners and scientists that the wood pellets burned at its power plant are not sourced sustainably and may be increasing carbon emissions.

In 2024, Drax agreed to pay £25m after the energy watchdog Ofgem , after it found it had failed to put “adequate data governance and controls in place” when reporting details of the type of wood historically sourced from Canada.