Ofgem's conclusion characterized the reporting failures of Drax's forestry operation in Canada as "technical in nature," indicating that there was no substantial evidence against the sustainability of its biomass.
City analysts viewed the end of Ofgem's investigation as a positive development for Drax, interpreting it as a boost for the company's prospects of securing new government contracts.
The regulator's finding that the bad reporting would not have influenced the subsidies received under the renewable obligations scheme meant that the resultant penalty was minor, equating to only 1% of Drax's stock market value.
An external audit of Drax's wood pellet supply chain will be mandatory in the future to verify the accuracy of its reporting, but this is seen as a manageable requirement rather than a setback.
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