Drax investigated by UK watchdog over biomass sourcing

"The Financial Conduct Authority (FCA) confirmed the investigation on Thursday, which will cover a period of more than two years between January 2022 to March 2024, and examine whether the company complied with disclosure and transparency rules, including in three annual reports. Drax said on Thursday that the FCA investigation related to certain historical statements regarding the company's biomass sourcing and the compliance of Drax's 2021, 2022 and 2023 annual reports with the listing rules and disclosure guidance and transparency rules."

"The regulator said: We can confirm that the FCA has opened an investigation into Drax Group. The news sent Drax shares down by 10% in early trading on Thursday. Drax was last year found to have supplied inaccurate data for previous government subsidies, leading to a 25m fine. Drax is expected to receive more than 10bn in renewable energy subsidies between 2012 and 2027, the current regime period, according to the thinktank Ember."

"It comes months after Drax's former head of public affairs and policy Rowaa Ahmar accused Drax of having made misleading claims over its sourcing of wood for biomass pellets, which were made as part of her claim for unfair dismissal at an employment tribunal. Drax denied her claims, and reached a settlement with Ahmar a week after the case opened. The company will cooperate with the FCA as part of their investigation."

The Financial Conduct Authority has opened an investigation into Drax covering January 2022 to March 2024 to assess compliance with disclosure and transparency rules, including review of three annual reports. The inquiry focuses on historical statements about biomass wood-pellet sourcing and whether Drax's 2021, 2022 and 2023 annual reports met listing rules and disclosure guidance. Drax will cooperate with the regulator. Shares fell about 10% on the announcement. The probe follows a former employee's accusation of misleading sourcing claims and comes after a prior £25m fine for supplying inaccurate subsidy data; Ember estimates over £10bn of subsidies to Drax through 2027.

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