Drax shuts down Canadian pellet plant amid tightening UK sustainability rules

DRAX, the UKs largest power station, will shut down one of its wood-pellet mills in Canada after declaring the facility “no longer commercially viable”, even as the UK places greater pressure on the company to demonstrate sustainable biomass sourcing.

The Williams Lake plant in British Columbia employs around 30 full-time staff and is one of several pellet operations run by Drax in Canada.

Describing the decision as “difficult”, Drax blamed the closure on a lack of available fibre following the shutdown of neighbouring sawmills and a failure to secure a reliable local supply.

Matt White, executive vice-president of pellet operations for Drax, said: “We are committed to supporting our employees through this transition and helping them find new opportunities.”

Scrutiny over biomass sourcing

The closure comes during a period of heightened scrutiny for Drax. Earlier this year, the UK’s Financial Conduct Authority launched an investigation into the company’s biomass sourcing practices, focusing on questions over the origins of its wood feedstock and potential misreporting of sustainability data.

Confidence was further shaken when Drax’s UK subsidy agreement was reduced from £869m (US$1.15bn) to £470m. Under the revised deal, Drax must now prove that 100% of the wood it burns is sustainably sourced, up from a previous requirement of 70%.

UK reliance

Despite ongoing debate around the environmental credentials of biomass, the fuel continues to play a major role in the UK energy system. A recent report produced by Imperial College London and commissioned by Drax, found that almost a fifth of the UK’s electricity this year was supplied from biomass.

Drax has also secured a new Contracts for Difference (CfD) agreement that will keep all four of its biomass units operating from 2027 to 2031.