Drax dropped from index of green energy firms amid biomass doubts
Doubts over sustainability of company’s wood-burning power plant mount within financial sector
Drax has been booted from an investment index of clean energy companies as doubts over the sustainability of its wood-burning power plant begin to mount within the financial sector.
The FTSE 100 energy giant, which has received billions in renewable energy subsidies for its biomass electricity, was axed from the index of the world’s greenest energy companies after S&P Global Dow Jones changed its methodology.
The exit from the S&P Global Clean Energy Index is a blow to Drax, which has vowed to become the world’s first “carbon-negative” energy company by the end of the decade.
It comes amid growing scepticism about its green credentials after the financial services firm Jefferies told its clients this week that bioenergy was “unlikely to make a positive contribution” towards tackling the climate crisis.
Drax was once one of the largest coal power generators in Europe before it converted four of the generating units at its North Yorkshire site to burn biomass instead. It received more than £800m in government subsidies and tax breaks to support the conversion last year, and could expect billions more in the future.
The article goes on to explain the issues, how Drax ships 2/3rds of its fuel across the Atlantic from the United States and how this carbon accounting juggling act no longer fools decision makers.
Of course the quotes near the end of the article are priceless.
A government spokesperson declined to comment.
A Drax spokesperson said its biomass “meets the highest sustainability standards” and that the “science underpinning carbon accounting for bioenergy” was “crystal clear”.