Government unveils subsidy proposals to support firms burning wood for energy

The Government has launched proposals to financially support companies generating electricity from burning wood pellets, including Britain’s biggest power station, Drax in North Yorkshire.

The consultation, which will run until February 29, will explore if and how it can provide more subsidies to bolster large-scale biomass generators in the UK.

Biomass currently benefits from controversial subsidies due to end in 2027.

The Government outlined four proposals for bridging this support until the early 2030s, when carbon capture systems are expected to be operating at biomass plants.

It comes after ministers approved Drax’s development bid to install carbon capture technology at its site, which provides a significant chunk of Britain’s electricity.

A host of MPs and activists have spoken out against the recent developments as claims that biomass is a clean energy source continue to be contested by many, including scientists.

In theory, burning wood pellets should create carbon-neutral energy because the trees and other plants burnt first absorb carbon, then are burnt and release the same carbon back into the atmosphere.

Critics say this assumes that the companies only use sustainable wood in their boilers. Investigations by the BBC and others alleged that Drax has used wood from environmentally important forests.

Proponents of the system say that if carbon capture systems are installed at biomass plants, and it works as advertised, they might actually absorb more carbon than they emit.

It would do this by trees absorbing carbon, then being burnt, with the carbon released by burning being captured and likely buried underground rather than being emitted into the atmosphere.

A Department for Energy Security and Net Zero spokesperson said: “No decisions have been taken and the Government is focussed on protecting people’s bills and any potential support would be subject to a rigorous value for money assessment – ensuring that any tax and bill payer money is spent wisely.

“The Climate Change Committee (CCC) has been clear that bioenergy with carbon capture and storage (BECCS) will be required to offset residual emissions in sectors that are difficult to decarbonise completely.”

Will Gardiner, Drax Group chief executive, said the announcement is a “welcome step forward” and the consultation is “necessary” to ensure biomass power stations continue to play an important role in the UK’s energy security and efforts to meet greenhouse gas reduction targets.

He said biomass with carbon capture systems is “currently the only credible large-scale technology that can generate renewable power and deliver carbon removals”.

Emma Pinchbeck, chief executive of Energy UK, said: “Drax Power Station is the largest provider of renewable electricity in the country, fitting carbon capture technology to it could remove millions of tonnes of carbon dioxide every year and ensure it continues to play an important part in supporting the country’s energy security.”

But the consultation announcement has also sparked fierce opposition from some MPs and activists.

Some highlighted that the CCC also said subsidies for large-scale unabated biomass electricity generation should end when the current round expires in 2027.

Conservative MP Pauline Latham said: “I am disappointed that the Government is thinking of continuing the subsidy to Drax but they are consulting on the issue so as many people as possible should participate in this important consultation.”

Alex Sobel, Labour MP for Leeds North West, said Drax has not delivered on its promise to roll out a carbon capture system despite “many years of multi-billion pound subsidy”.

“The burning of virgin wood to make electricity is not renewable or sustainable,” he said.

Liberal Democrat MP Wera Hobhouse said: “Biomass is not a form of renewable energy and should not be treated as one. That means no support should be given to the industry from the Government.”

Meanwhile, Doug Parr, Greenpeace UK’s policy director, called for the Government to “just get on with delivering genuinely green energy solutions, like wind, solar and storage, that will actually lower bills, not increase them, and help save, not trash, the planet”.

Matt Williams, campaigner for Cut Carbon Not Forests, said: “There has been a series of scandals with major bioenergy companies polluting the air of vulnerable communities where the wood pellets are made. It’s time to consign burning trees in power plants to the past and focus on protecting forests.”