Campaigners hit out at Government ahead of expected Drax subsidy announcement

Drax said it would not be commenting on rumours and speculation.

The company’s power station in Selby, North Yorkshire, receives millions of pounds a year in direct Government subsidies, in addition to multimillion-pound carbon tax breaks.

Money for the subsidies comes from energy bill payers, because the electricity produced from burning wood pellets is classified as renewable.

Biomass as a clean energy source has long been under dispute and the Government has faced calls to end financial support for companies such as Drax.

Matt Williams, senior forest protection advocate at the NRDC, said: “Billions more for companies like Drax - the UK’s single largest polluter - mean the Government is placing all its bets on high-carbon infrastructure.

“Along with a new Heathrow runway, this decision will make many question whether Labour cares about the environment at all.”

Last year, Drax agreed to pay £25m after a probe by energy industry regulator Ofgem found that the company had failed to properly report data on the types of wood it uses for its biomass pellets.

Just last month, Sir Keir Starmer pledged to review a report which MP Rosie Duffield said accused Drax of illegally claiming Government subsidies.

The Canterbury MP said at Prime Minister’s Questions: “While Ofgem has been asleep at the wheel, a recent KPMG report has concluded that Drax claimed those subsidies illegally.

“Will the Prime Minister today demand to see that KPMG report before giving another £1 of taxpayers’ money to Drax?”

At the time, Sir Keir replied: “It is an important issue, of course we will look at the report, but I don’t join in her description.”

A DESNZ spokesperson said: “The situation we inherited for large scale biomass generators was unacceptable.

“When energy prices spiked as a result of Putin’s weaponisation of gas supplies, some biomass generators made excessive profits.

“We are considering this issue carefully - we want a sensible solution that delivers for billpayers and we will provide an update shortly.”

Speaking about Ms Duffield’s comments, Drax spokesperson said: “Ofgem found no evidence that our biomass failed to meet the sustainability criteria of the Renewables Obligation (RO) scheme, nor that the ROCs we received for the renewable power we produced had been provided incorrectly.

“The KPMG report referenced by Rosie Duffield did not come to that conclusion and was seen by Ofgem during their investigation.

“Drax provides secure renewable power to millions of homes and businesses when they need it, not just when the wind is blowing, or the sun is shining. The science underpinning biomass generation is supported by the world’s leading climate experts, including the UN’s IPCC and the UK’s CCC. “