The Financial Conduct Authority (FCA) has concluded its nearly 10-month investigation into Drax Group, the operator of a major biomass power plant in Selby, North Yorkshire, finding no evidence that the company misled shareholders regarding the sourcing of its wood pellet fuel. The regulator reviewed extensive documentation related to Drax’s biomass procurement practices but determined there was no basis for further enforcement action.

The investigation, which began last year, focused on whether the annual reports and accounts issued by Drax between 2021 and 2023 contained misleading information or omissions about the origins of the wood pellets used at its facility. Drax imports millions of tonnes of these pellets, primarily from North America, as fuel to generate electricity, asserting that its biomass is derived from sustainably managed forests and contributes to reliable renewable energy production.

Concerns about the company’s sustainability claims emerged following a 2022 BBC Panorama documentary that reported Drax sourced wood pellets from mature forests in Canada. In 2024, Drax agreed to a £25 million payment to settle with the energy regulator Ofgem after the watchdog found lapses in Drax’s data governance related to reporting the type of wood sourced from Canada. Ofgem’s inquiry concluded the breaches were technical rather than deliberate and found no indication that the biomass was unsustainable or that Drax had improperly claimed renewable energy subsidies.

Last year, investigations by environmental experts suggested it was "highly likely" that Drax continued to source wood from ecologically sensitive Canadian forests as recently as summer 2025. Following these revelations, Drax announced plans to reduce its reliance on Canadian pellets and to cease sourcing wood from British Columbia within the next year.

Will Gardiner, Drax’s chief executive, emphasized the company’s commitment to regulatory compliance. He welcomed the FCA’s decision to close the investigation without action, describing it as a positive outcome for the firm.

The FCA’s closure of the inquiry ends a period of scrutiny over the transparency and sustainability of biomass fuel supply chains in the UK’s renewable energy sector, amid broader debates about the environmental impact of biomass power generation.