Drax seeks to open two multi-billion carbon capture plants in US following Government snub for Yorkshire plans

The Government previously announced that it would pledge £20 billion for CCS projects in the UK, but did not select Drax to be a beneficiary of its first initial funding scheme. Drax still hopes to secure future Government funding for the Yorkshire plan.

The BECCS method of energy production involves burning wood pellets, the carbon emissions from which are then collected to be stored underground.

Drax previously outlined a fully funded plan to invest around £3 billion into two BECCS units at its Yorkshire power station, along with pellet production and pumped hydro storage.

Drax has cited the “supportive investment environment” created by the US Inflation Reduction Act as a factor in its decision to undertake the investment in two new BECCS plants on top of its previously-announced proposals.

The Act, which was signed into law in 2022, contains $500 billion in new spending and tax breaks, with the aim of boosting “clean energy” in the US.

Drax Group CEO, Will Gardiner said: “Drax is a growing and sustainable, international business providing flexible, renewable energy and carbon removals solutions, via BECCS, which put us at the heart of global efforts to deliver net zero and energy security.

“Our plans to invest billions in critical renewable energy and carbon removal technologies will help to tackle the climate crisis and could create thousands of jobs whilst generating secure, renewable power.”

Drax’s BECCS plans have, however, received criticism from some scientists and MPs who claim that the method of energy production has the potential to drive climate change, rather than reducing emissions.

In December of last year, a group of 650 scientists signed a letter urging world leaders to stop industrial-scale forest biomass, citing risks to biodiversity and doubts that BECCS would remove carbon dioxide from the atmosphere by 2050.

Drax denies these claims, and maintains that BECCS is vital to achieving Net Zero.

Drax’s announcement, released ahead of its Capital Markets Day, outlines plans for two new BECCS sites in the Southern US.

The group says it has selected two sites in the US for BECCS, and is evaluating nine additional sites for “greenfield and brownfield BECCS”.

The two selected sites would comprise a total investment of around $2 billion per plant, with the target of being fully operational by 2030. Drax says the sites have “been selected and are progressing to option”.

In its announcement, Drax said: “The commercial model for US BECCS includes Power Purchase Agreements, long-term CDR offtake agreements and a direct pay tax incentive under the Inflation Reduction Act of $85/tonne.”

Drax has also announced that it is developing a plan to add CCS to one of its pellet plants located in Louisiana.