Drax pulls out of the government’s climate plan, meaning that long standing commitments by Drax that it would ‘help keep the lights on’ are now in serious doubt.
The biomass company, which generates energy by burning wood pellets imported to its North Yorkshire plant near Selby, has controversially been backed by successive British governments since 2014. Recently it pledged that, in the near future, vast carbon capture facilities would catch and bury its harmful emissions. Subsidies for Drax represent some of the most high-profile and much criticised British government support for green energy. And the addition of carbon capture — using a largely untested technology, known as bioenergy with carbon capture and storage (BECCS) — was considered essential for the country to hit legally binding goals on driving down U.K. emissions to net zero by 2050 with the government’s independent advisers at the Climate Change Committee warning that, without BECCS, ministers will struggle to hit their net zero goals.
In February, Drax signalled that it’s ditching those plans — leaving a substantial hole in the government’s carbon neutral ambitions and raising questions about the government’s ability to lock down promises given by energy firms. In February 2025 we reported changes to the subsidies that Drax would receive after 2027 as outlined in a Government Heads of Terms Agreement with Drax Power Ltd for a Low Carbon Dispatchable Contract for Difference (CfD) at their 2.6GW Selby power station The Heads of Terms defined the commercial terms that would underpin a new contract to be finalised. On 5 November 2025 the UK Government signed a ‘Contract for Difference’ with Drax Group which allowed the Yorkshire biomass power station to receive financial support post March 2027 when its current subsidies run out.
Drax’ vision is to develop AI infrastructure which it hopes will start operating in 2027. Last word to Alex Sobel Labour MP for Leeds Central and Headingley on Drax going back on BECSS who said that progress never materialised. “So, it’s no surprise they are shelving it,” he added. “Now they are burning the wood from deforestation in America and not capturing that carbon either. It’s time not just to end the [subsidy deal] but to close the most carbon emitting power station in the U.K.”
Read more on Drax subsidiaries here: https://www.theguardian.com/business/2026/apr/16/drax-renewable-energy-subsidies-wood-pellets