Drax Purchase Would Implicate the United Kingdom in Loss of Canadian Forests

Today, Drax—which operates the world’s largest wood-burning power station—released its earnings report, continuing to greenwash with its claims that biomass is a “green” energy source.

But, in reality, Drax is simply doubling down on its destructive wood-burning business model, as evidenced by its recent decision to purchase Pinnacle—Canada’s largest wood pellet manufacturer—to become the world’s third-largest manufacturer of wood pellets.

While the U.K. attempts to burnish its environmental record ahead of hosting the COP 26 and push countries toward protecting at least 30 percent of the planet’s lands and oceans by 2030 (30x30) at the meeting of the Convention on Biological Diversity (CBD), its wholesale support for biomass, including £2 million per day in subsidies to Drax, smacks of hypocrisy.

Here are the top reasons this deal makes absolutely no sense:

1. It will exacerbate biodiversity loss. Wood that Pinnacle uses to make pellets comes from one of the most important forests on the planet: Canada’s boreal forest. One of the largest intact forests in the world, the boreal is a refuge for some of North America’s most treasured species and a cradle for our nation’s songbirds. Each spring, billions of migratory birds alight in backyards across Mexico and the United States on their way to their nesting grounds in the boreal, then fly south again for the winter to places as distant as Argentina and Antarctica. The boreal is also home to a host of imperiled species, including threatened woodland caribou and Canada lynx, whose numbers continue to decline primarily due to habitat loss. Biomass is a growing culprit in driving that loss, with investigations showing that, despite industry claims, Pinnacle obtains wood for its pellets from businesses using harmful practices like clearcutting and logging of whole trees. Once a forest has been clearcut, it can take generations to regrow sufficiently to recover its previous biodiversity, carbon stores, and ecosystem productivity—long past the time we have to address the biodiversity and climate crises.

2. Its implications for Indigenous rights. The boreal is also home to more than 600 Indigenous communities, many of whose cultural identities are entwined with the forest. Widespread logging in the boreal for biomass and other products threatens many Indigenous Peoples’ cultures, livelihoods, and relationships to the land, some of whom have only a fraction of their traditional territory left intact. While Indigenous communities’ relationships to the logging industry vary, Indigenous Peoples across most of Canada do not have the power to determine how their land is used, their rights being subsumed under industry’s economic interests. Drax already has a dismal record of harming local communities where it operates, and, just last week, was hit with the largest penalty issued against the industry for emitting dangerous air pollution around its pellet plant in Mississippi.

3. It will harm a critical carbon store. The boreal is one of the world’s greatest climate allies, storing nearly twice as much carbon as there is in the world’s combined oil reserves. Some of this carbon has been locked up in boreal soils for thousands of years, safely sequestered away from the atmosphere. When the forest is logged, it emits this pent-up carbon—carbon that Canada does not fully account for nor regulate. Just like decarbonization, reining in logging to feed demand for biomass and other materials is imperative for keeping global temperatures below 1.5 degrees Celsius.

4. U.K. bill payers are funding this raw deal. Drax exists almost solely because the U.K. is subsidizing it (i.e., its pretax profits are dwarfed by the subsidies it receives). Now Drax is buying Pinnacle for a reported £436 million. In other words, Britons pay a levy on their energy bills each month thinking they're supporting renewable energy. But it’s actually going to subsidize Drax to the tune of nearly £1 billion a year so they can do things like expand their destructive business model. Without immediate reform, climate think tank Ember estimates U.K. energy bill payers will spend £13 billion to support large biomass power plants (including £10 billion to Drax alone) until most subsidies expire in 2027.

5. It will worsen climate change. Biomass energy is already a climate boondoggle since it creates emissions every step of the way, from the time trees are cut down for biomass in the forest to the smokestack when trees are burned to generate electricity. On the landscape, replacing older trees with saplings after harvest reduces the amount of carbon stored in the regrowing forest (even under the best-case scenario in which trees are replanted and regrow immediately). This is a significant source of emissions, known as foregone carbon sequestration. Biomass harvest in forests also releases carbon from the soil. Next, power plants like Pinnacle’s generate emissions by burning fossil gas (or more wood) to manufacture their pellets from the cut wood. And from there, the carbon footprint only grows, with the transport of wood pellets across the globe and the massive carbon emissions from Drax’s smokestacks. Sadly, under the government’s rules, which categorize biomass as a “renewable energy,” Drax can treat its smokestack emissions as zero. With an accounting flourish, Drax’s roughly 13 million tons of CO2 emissions per year just magically disappear in the ledger. And policymakers get to take credit for delivering “low-carbon electricity.”

6. It shows that industry doesn’t actually plan to rely on domestic biomass. While the U.K. government has repeatedly signaled that it plans to shift to home-grown agricultural residues and energy crops for bioenergy production, in large part due to all the well-documented risks associated with its biomass imports, Drax’s deal wholly undermines those promises, locking biomass import supply chains even further into the U.K. energy market. Per reporting, the acquisition of Pinnacle will more than double Drax’s pellet production capacity, making Drax the world’s third-largest pellet manufacturer. With the addition of Pinnacle’s 11 sites, Drax will own 17 pellet plants and development projects, enabling it to produce 4.9 million metric tons of wood pellets annually from 2022.

7. Putting carbon capture and storage on Drax Power Station will not solve these problems. U.K. policymakers are being sold the idea that bioenergy with carbon capture and storage (BECCS) can create a "carbon-negative power station," but implementing this technology requires billions more in subsidies. Large government subsidies should deliver large climate benefits. Yet all evidence suggests that BECCS at Drax will be costly and will not deliver negative emissions after full emissions accounting for biomass in the power sector. In a scenario using BECCS, the stack emissions at the power plant would in theory be captured and stored. But it is critical to note that process/transport emissions and the foregone sequestration are uncapturable. These off-site emissions are released to the atmosphere regardless of on-site efforts in the U.K. to capture stack emissions at the power plant. Rather than prioritizing additional subsidies to run BECCS at Drax, a high priority from a climate perspective would be to replace Drax and other industrial scale bioenergy with low-carbon renewables.

8. This further breaks the U.K.’s promises to its citizens and the global community. The U.K.’s use of biomass is already inconsistent with its commitments regarding biodiversity and climate under the Paris Agreement and the CBD, not to mention the U.K.’s own 25-year environment plan. This deal just worsens the blow. Indeed, the U.K. agreed to a net-zero target by 2050 under the Paris Agreement and to advancing 30x30 at the upcoming CBD meeting.  But how can the U.K. meaningfully advance its net-zero goal if it’s using a fake renewable energy to do so? And how can it commit to 30x30 when, as a result of its biomass demand, it continues to contribute to forest loss around the world, undermining other countries’ progress toward their CBD targets?

What the world needs right now is the opposite of these types of deals: no more burning wood to generate electricity; investments in real clean energy solutions like solar, wind, and batteries; and policies that put protection of intact forests first.

By handing over bill payers’ money to Drax, the U.K. is blemishing its environmental record at a time when our climate and natural systems are already in crisis mode. The U.K. government has the authority to reverse course by ending most biomass electricity subsidies immediately, and it should do so.