Drax Electricity fell more than 5% on the London Stock Exchange on Tuesday after a BBC documentary aired Monday claiming the company was cutting down trees from ancient Canadian forests.
The company, which has been criticized for using biomass to green its production and which “has received billions of pounds in green energy subsidies from British taxpayers, is clearing environmentally important forests,” according to one. BBC Panorama investigation.
Although the company claims it “only uses sawdust and wood residues,” the BBC “found that some of the wood comes from primary forests in Canada,” the British chain explained on its website Monday.
Drax shares fell 5.35% to 570.25 pence on Tuesday by 09:30 GMT. “Being accused of negligence on prime-time television is never a good thing and it’s no wonder that Drax’s stock” is tumbling, according to AJ Bell analyst Danni Hewson.
However, “Canada has some of the most regulated forests in the world, ensuring that forests in British Columbia,” the Canadian province where the BBC conducted its research, “are managed properly,” Drax replied in a statement.
Current British Chancellor of the Exchequer Kwasi Kwarteng reaffirmed his support for Drax’s use of biomass in early August, when he was Minister of Energy, shortly after privately criticizing his “unsustainable” practices, according to the FT.
Drax operates the UK’s largest coal-fired power plant in Yorkshire, Northern England, which has begun converting to biomass, an energy source environmentalists claim is renewable, more than a decade ago.
Environmental NGOs filed a case with the OECD in late 2021 disputing Drax’s claims that energy from biomass is “green”.
Drax says emissions from biomass combustion are offset by “negative emissions” through carbon capture and storage and that the forests from which the wood comes are “stable or growing”.
According to the energy company’s plan, the CO2 captured by burning wood pellets will be transported in a pipeline to a geological storage site under the North Sea.
