Investigation Initiated over Accusations Leveled against Drax, a 'Renewable' Power Producer, Following Allegations of Greenwashing by Former Politician Ed Miliband
In a series of developments, British energy company Drax Group is currently under investigation by the Financial Conduct Authority (FCA) and facing criticism over its wood pellet sourcing practices and alleged health impacts on local communities.
Drax Group, which has received billions of pounds of government funding for its Selby plant in North Yorkshire, generates around 5% of Britain's electricity by burning millions of tons of wood pellets each year. The Selby facility primarily sources its wood pellets from sustainable forests in the southeastern United States.
However, critics question whether all materials used by Drax are from renewable sources, and activists from Gloster in Mississippi claimed earlier this year that pollution from Drax's plant has caused health issues for people nearby, including heart disease, cancer, and respiratory problems.
The FCA's investigation into Drax Group is in response to certain historical statements regarding the company's biomass sourcing from January 2022 to March 2024. The investigation continues, and the company has been asked to provide additional information.
In addition, the compliance of Drax's 2021, 2022, and 2023 annual reports with City listing rules and disclosure and transparency requirements is also under scrutiny.
In early trading, Drax shares slipped 6.7 per cent, erasing 2022 gains so far. The Department for Energy Security & Net Zero has been contacted for comment.
This news comes as the process of burning wood pellets is considered a means of sourcing renewable energy, making Drax's practices particularly relevant in the context of the UK's efforts to transition to a low-carbon economy.
As the investigation and controversy surrounding Drax Group continue, the company will likely face increased scrutiny and pressure to ensure its operations are sustainable and do not negatively impact local communities or the environment.
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