The Drax electricity company was down by more than 5% on the London Stock Exchange on Tuesday, after the broadcasting of a BBC documentary on Monday, which claimed that the group was cutting trees belonging to ancestral forests in Canada.
The company, which has been criticized for its use of biomass to green its production and which “has received billions of pounds in green energy subsidies from the British taxpayer, is cutting down environmentally important forests,” according to a BBC Panorama investigation.
While the company claims that it “uses only sawdust and wood waste”, the BBC “discovered that some of the wood comes from primary forests in Canada”, explained the British channel on its website Monday.
Drax’s stock was plunging 5.35% to 570.25 pence on Tuesday around 09:30 GMT. “Being accused of bad practices on prime-time television is never positive, and it’s no wonder Drax’s stock” is falling, according to AJ Bell analyst Danni Hewson.
Yet “Canada has some of the most regulated forests in the world, which ensures that the forests of British Columbia,” the Canadian province where the BBC conducted its investigation, “are properly managed,” Drax responded in a statement.
Britain’s current Chancellor of the Exchequer Kwasi Kwarteng reaffirmed his support for Drax’s use of biomass in early August, when he was Energy Minister, shortly after privately criticizing its “unsustainable” practices, according to the FT.
Drax operates the UK’s largest coal-fired power station in Yorkshire, northern England, which began converting to biomass, an energy source that environmentalists dispute as renewable, over a decade ago.
Environmental NGOs launched a case before the OECD in late 2021 challenging Drax’s claims that energy from biomass is “green”.
Drax asserts that the emissions from burning biomass are offset by “negative emissions” through carbon capture and storage and that the forests from which the wood is sourced are “stable or growing.”
According to the energy company’s plan, the CO2 captured from the burning of wood pellets is to be transported in a pipeline to a geological storage site under the North Sea.
