YORKSHIRE, England ― The vast Drax power station in north Yorkshire helps keep Britain’s lights on. 

The Labour government is just the latest administration to pour subsidies worth billions of pounds into the plant, which burns tons of imported wood pellets every year to generate a big slice of the power the country needs ― a crucial role after global energy markets were upended by Vladimir Putin’s invasion of Ukraine.

Drax’s bosses also claim that, because their biomass operations are deemed climate-friendly, ministers will miss their net zero goals without it.  

Yet its critics are growing in number and volume. 

Climate campaigners shout greenwashing. Senior politicians who once backed Drax now trash its impact on the environment. The idea of relying on biomass long-term is “dangerous,” says one Labour backbencher. 

All the while, Drax is locked in talks with the government over even more financial support, this time for upgrades which would secure its future and ensure its compatibility with stringent climate goals. At the same time, the U.K.’s leading financial watchdog is digging deep into its operations — an investigation which could lead to a hefty fine and another dent to the plant’s reputation.  

POLITICO went inside. 

Inside the factory 

The Drax Power Station covers a sprawling 1,250 acre site near the Yorkshire village of Selby. Once a bastion of coal power, it is now the U.K.’s leading source of biomass, shipping in wood pellets from trees harvested in North America.  

The plant consists of 12 cooling towers with chimneys taller than the London Eye. Its four biome domes are 65 meters high, each vast enough to house the Royal Albert Hall. These power its four biomass terminals, which meet 8 percent of all the U.K.’s energy demands. The pellets are moved around the site on a 25-carriage train, decorated with the Drax logo.  

POLITICO navigated the narrow walkways above the factory’s giant terminals, wearing ear protectors to block out sounds of the factory floor, and squeezed into clanking elevators. Hi-viz workers dragged wheelbarrows of material around the site. 

Successive Conservative and Labour governments have decided Drax is essential to the U.K. energy supply. Crucially, watchdogs and ministers also treat biomass as a renewable power source (because emissions are offset through planting new trees) — giving Drax a central role as the government strives to hit stringent targets on reducing emissions (known as carbon budgets.) 

“It does help keep the lights on as a really big chunk of capacity. It is the single biggest potential point source of negative emissions in a country, making it very appealing when connected to carbon capture and storage,” said Adam Bell, former head of energy at the old Department for Business, Energy and Industrial Strategy, now director of policy at the Stonehaven consultancy.  

“By itself it could make achieving carbon budgets considerably easier, which is why [the Department for Energy Security and Net Zero] like keeping it in play.”

Money has flowed in. 

Conservative ministers handed Drax an estimated £6 billion in subsidies between 2012 and 2024. Their Labour successors earlier this year unveiled £2 billion in fresh support. 

The latest tranche of cash is designed to back Drax’s operations between 2027 and 2031, as it negotiates with government over upgrading the plant with carbon capture technology (CCS) which would catch and safely dispose of the carbon it emits. 

“The situation that we inherited from the last government meant that we had to consider matters such as security of supply and how we could secure the best deal for bill payers. That is what we did,” Energy Secretary Ed Miliband told MPs in March. 

“I’ve taken many a minister around the power station,” said Richard Gwilliam, Drax’s director of future operations. Miliband, for now at least, has not taken up the offer.  

From right and left  

But as ministers continue to strike deals with Drax, its critics are circling. 

At the point of generation, green campaigners argue, Drax’s burning of wood pellets is more emissions-intensive than coal. The climate think tank Ember reckons the Yorkshire plant was the U.K.’s single largest source of CO2 emissions in 2024 — producing 13.3 million tons. 

“Relying on millions of tons of imported wood to keep the lights on is dangerous,” Labour MP Alex Sobel wrote in The Guardian this summer, backing tighter government terms on the subsidies and slamming biomass as an alternative to clean energy like solar and wind farms. Former environment minister and fellow Labour MP Barry Gardiner is campaigning for the energy regulator to reopen investigations into Drax’s financial reporting. 

Polly Billington, a Labour MP and member of parliament’s Energy Security and Net Zero Committee, says she backs government efforts to introduce a “much stricter regime by tightening sustainability requirements, reducing the overall subsidy and closing profit loopholes.” 

On the right, Conservative Shadow Energy Secretary Claire Coutinho, who approved Drax’s expansion plans  when she was in office in 2024, is now among its fiercest critics. “Going green by burning trees is absurd,” she said last month.  

Reform UK’s Energy Spokesperson Richard Tice says his party would end the subsidies, calling the environmental damage “scandalous.” 

But Drax insists that biomass, combined with carbon capture upgrades, is the only way for the U.K. to hit its green goals.  

“If this country wants to meet its climate targets, I can’t see a way to do it without large scale carbon removal. That’s not [just] me, that’s the committee on climate change,” Gwilliam said. Last year Will Gardiner, Drax’s chief executive, warned the government’s 2030 decarbonization goal is in jeopardy if the company does not get its CCS in place. 

The Climate Change Committee, in its seventh carbon budget, said: “While its role is limited to sectors where there are few, or no, alternatives, we cannot see a route to net zero that does not include CCS.”  

“I think we can find common ground on the economic value these projects can bring,” Gwilliam said. He has talked with other companies in the Humber about the value of local industrial jobs, he said. “These are highly skilled, good quality industrial jobs, which are being repurposed towards a sort of greater role than carbon intensity.”

Meet the regulators 

Away from the political pressure, the City regulator is also gunning for Drax. In August, it opened an investigation into statements the company has made about its biomass sourcing and the compliance of recent annual reports with listing and transparency rules. 

In a separate probe, energy regulator Ofgem slapped the company with a £25 million fine last year, after finding the firm breached reporting requirements for its green subsidies. 

Gwilliam twice declined to comment on the FCA’s ongoing investigation, instead referring POLITICO to Drax’s initial statement confirming its cooperation with the watchdog.  

The FCA can impose regulatory sanctions including public censure and financial penalties. This year it has fined Barclays around £40 million and Monzo Bank £21 million for breaches. 

Meanwhile, Drax executives are locked in talks with the government over long-term financial guarantees, mirroring those already available to wind and solar developers, to back the CCS upgrade plans, known as BECCS. Shareholders have been briefed to expect a decision by the end of the year.

A green light would lock the U.K. in to supporting its power station for generations — to the horror of some Whitehall insiders. 

“Giving it a BECCS upgrade would be a scandalous waste of money and will feed the net zero backlash more oxygen,” warned one former DESNZ official. “The company and supply chain is always going to be investigated for something or other because the business model and green credentials are fundamentally nonsense.” 

But Drax remains bullish. “I hope we don’t see an erosion of the U.K.’s lead as a climate champion, and I think projects like this [BECCS] can be the poster child for the positive impact net zero can have on local economies,” Gwilliam said.

A government spokesperson said that “sustainable biomass contributes to our decarbonization efforts.”

They added: “Drax will operate for less time under a clean power system and will need to use 100 percent sustainably sourced biomass, with not a penny of subsidy paid for anything less. There will be substantial penalties for any failure to meet these strict criteria, protecting both consumers and the environment.”