UK's FCA probes Drax Energy Company for biomass sourcing transparency issues

Written by Emily J. Thompson, Senior Investment Analyst

Source: Reuters

Updated: Aug 28 2025

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Source: Reuters

Investigation by Financial Watchdog: The UK's financial watchdog is investigating Drax Group's biomass sourcing disclosures, following a previous inquiry by the energy regulator, Ofgem, which resulted in a £25 million fine for misreporting data.
Environmental Concerns: Drax has faced criticism from environmental groups regarding its wood sourcing practices, although it claims to use only wood residuals from lumber production and argues that sustainable sourcing can promote forest growth.
Impact on Share Prices: Following the announcement of the FCA investigation, Drax's shares dropped over 12%, reflecting increased scrutiny on the company's operations and future subsidy plans from the government.
Future Goals and Regulations: Drax aims to achieve net zero carbon emissions by the end of 2024, amidst Britain's broader goal to decarbonize its electricity sector by 2030, necessitating new renewable energy projects and infrastructure.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.