The Drax power plant in Yorkshire claimed £999m in subsidies from the government in 2025 despite the controversial nature of its claims to be a low-carbon energy generator.

The figures, calculated by the Ember think tank, showed that Drax received £728m through the Renewables Obligation (RO), which covers three of the four generating units, and Contracts for Difference (CfD) payments for the remaining units, worth £271m.

The 2.6GW facility now uses biomass as its primary fuel following a lengthy conversion process from its roots as a coal-fired power plant. The wood pellets burned by the power plant have an equivalent carbon intensity to coal – which is considered to be the most carbon-intensive fossil fuel – but are burned at higher volumes due to their low energy density, meaning that burning wood emits more CO₂ than coal or gas per kWh of electricity.

The two fuels are not directly equivalent; however, biomass can be considered a climate-friendly fuel due to its renewable nature and the fact that the initial tree growth sequesters carbon from the atmosphere. On the downside, it takes up significant amounts of land to grow that could otherwise be used for food crops.

Drax’s recent decision to scale back investment in its carbon capture facility, as well as the emissions from transporting the pellets from where they are produced in the US and Canada, has led to concerns that the plant is not as carbon neutral as it claims. 

The Ember report notes that legislation changes are expected to see the taxpayer cost of subsidies to the plant halve from early 2027. Firstly, the RO scheme for large-scale biomass burning is coming to a close in Q1 2027 and a new CfD scheme, at around half the current subsidy total, will then run for up to four years before ending in 2031.

Despite these changes, “emissions will likely remain higher than any other industrial site or power station in the country, cementing Drax’s status as the UK’s largest producer of carbon emissions,” Ember said.

“In the longer term, the rationale for continued subsidies for Drax is faltering as plans for emissions reduction are undermined.”

In February, Drax said it would stop burning controversial Canadian wood pellets and switch to a US-only supply from 2027 due to closures of neighbouring sawmills and the loss of a bid for key local supply that have led to a significant reduction in fibre availability.

According to The Guardian, the decision to end its imports of Canadian biomass to the UK was linked to Canada’s decision to impose tariffs on its biomass exports.