Drax Group’s plans to develop a large-scale, “sustainable” data centre have suffered a significant setback following the withdrawal of support from both the UK government and North Yorkshire County Council. The company, operator of Britain’s largest power station, had sought to designate its site as an “AI growth zone,” which would have eased planning restrictions for a data centre more than ten times the current largest facility in the country.

Drax’s proposal depended on government subsidies to install carbon-capture technology on its biomass power plant smokestacks, aiming to create what it describes as the world’s first “carbon-negative” data centre. The company contends that these carbon-capture devices would permanently store carbon dioxide absorbed by the trees it burns to generate electricity. However, the approach—known as bio-energy carbon capture and storage (BECCS)—has drawn criticism from environmental groups, who argue that complete capture of emissions is not feasible and that the process relies on unsustainable levels of logging.

The debate is further complicated by Drax’s controversial biomass sourcing history. In 2024, the company paid a £25 million penalty after being found to have used wood from Canadian old-growth forests without declaring it, violating sustainability reporting regulations. The energy regulator Ofgem has warned the company of potential harsher penalties if similar breaches occur again.

Environmental activism has intensified in recent months, influencing local attitudes and public policy. North Yorkshire County Council officials cited a marked shift in sentiment amid protests targeting large data centre developments. Student activism at the University of York has opposed the burning of trees to power data centres, while a petition opposing Microsoft’s data centre plans near Leeds has garnered over 44,000 signatures. Elsewhere in the UK, sizeable protests have arisen against Xlinks’ proposed 1.5-gigawatt data centre in north Devon, situated within a UNESCO biosphere reserve. Similar concerns have emerged in the United States, where communities contest the environmental and resource impacts of large data centre projects.

Drax’s annual report highlights the urgency for new revenue streams, noting that without government support or data centre income, its power station may reach the end of its “useful economic life” by 2031. Despite losing government backing and local support for its expansion, the company insists it will move forward with its 1.2-gigawatt data centre powered by biomass generation. However, it has yet to secure any technology companies as tenants or reveal investors for the project, missing its own 2025 target for such commitments.

In the interim, Drax is preparing a planning application for a smaller, initial 100-megawatt data centre that would draw power from the electricity grid instead of its own biomass plant. The future of the company’s larger carbon-negative ambitions, however, remains uncertain amid growing environmental scrutiny and shifting regulatory priorities.