Biomass sector set for sustainability regulation and carbon capture funding

One example includes the intention to make sure that 100 per cent of “woody biomass”, such as pellets, are to be “provenly sustainable”.

It comes after concerns were raised by both BBC’s Panorama and the energy regulator Ofgem over the green credentials of Drax and its sourcing of its fuel from North American forests.

However, the document published yesterday morning did not touch on the future of subsidy arrangements for companies such as Drax which are set to expire in 2027, with climate change bodies calling for them not to be extended or renewed beyond the deadline.

It is understood that this will be covered by a separate review of the electricity market which is set to conclude in the Autumn.

The new strategy has now tied the future of biomass in the UK to carbon capture technology, with companies warned that future funding arrangements will need to involve Bioenergy with Carbon Capture and Storage (BECCS).

This will come as positive news for Drax, which has been pushing for Government funding for its own BECCS project in North Yorkshire which missed out on support earlier this year when Grant Shapps, the Energy Secretary, unveiled a swathe of new energy projects.

A government spokesperson said: “When used carefully, sustainable biomass is a versatile resource and a potential alternative to fossil fuels for power, heating and transport.

“Our new strategy sets out the role this can play in multiple UK sectors, such as industry and aviation, and alongside carbon capture and storage, it will help cut emissions while creating jobs, growing the economy and strengthening Britain's energy security.

“Sustainability is at the heart of this strategy, with a new commitment to ensure only the highest standards underpin this industry.”

It comes after a minister warned that Drax’s biomass power plant could lose subsidies if it was found not to have complied with sustainability requirements.

The House of Lords heard concerns last month over the environmental credentials of the power station in North Yorkshire, one of the UK’s largest, and which burns biomass such as wood pellets and receives green subsidies.

One peer called for independent scientists to be sent to Canada to verify the sustainability of wood used to make biomass pellets, and another accused a minister of having his “head in the sand” over the issue.

The energy regulator Ofgem said in May that it was investigating whether Drax Power Limited is in breach of “annual profiling reporting requirements relating to the Renewables Obligations scheme and other related matters”.

Last week, campaigners from Greenpeace, WWF, the RSPB, Wildlife Trusts, Wildlife and Countryside Link and Mighty Earth and others called on the Government to end all subsidies for burning wood from forests and energy crops in power stations and to not award energy companies any new support or contracts to do so.

Government minister Lord Callanan told the upper chamber: “Ofgem are investigating these matters.”

He added: “If it is proved that they are not in compliance, then of course some of the value of the certificates they have received will be withdrawn.”

Will Gardiner, Drax CEO, said: “We welcome the UK Government’s clear support for sustainably sourced biomass and the critical role that BECCS can play in achieving the country’s climate goals.

“The inclusion of BECCS at the top of a priority use framework is a clear signal that the UK wants to be a leader in carbon removals and Drax is ready to deliver on this ambition.

“We are engaged in formal discussions with the UK Government about the project and, providing these are successful, we plan to invest billions in delivering BECCS at Drax Power Station in North Yorkshire, simultaneously providing reliable, renewable power and carbon removals.”