Government support for biomass

Public Accounts Committee Closed Inquiry
Opened: 4 Feb 2025 Closed: 16 Jun 2025 Parliament page
Over £20bn in support for businesses and households using biomass (such as plants or food waste) for fuel has been provided by Government since 2002. In combination with carbon capture, usage and storage , the Government is relying on the use of biomass to make a significant contribution to reaching … Read more
2 Recommendations
23 Conclusions
1 Report
1 Oral session
5 Letters
1 Event
Activity timeline 9 events
15 Dec
2025
Correspondence
15 Dec
2025
Correspondence
15 Dec
2025
Correspondence
10 Jul
2025
Report published
25 Apr
2025
Report published
27 Mar
2025
Correspondence
27 Mar
2025
Correspondence
3 Mar
2025
Oral evidence
3 Mar
2025
Formal meeting (oral evidence session) · The Thatcher Room, Portcullis House
Oral evidence sessions 1 session
3 Mar 2025
View on parliament.uk
Ashley Ibbett · Department for Business, Energy and Industrial Strategy Dr Sarah Redwood OBE · Department for Energy Security and Net Zero Jeremy Pocklington · Ministry of Defence Jonathan Brearley · Ofgem Jonathan Brearley · Department for Energy Security and Net Zero Kiera Schoenemann · Ofgem
Title HC No. Published Items Response
22nd Report - Government’s support for biomass HC 715 25 Apr 2025 25 Responded
Recommendations & Conclusions
25 results
2 Recommendation Deferred
22nd Report - Government’s support…
Estimate cost and test effectiveness of monitoring increased biomass sustainability and Drax's sourcing.
DESNZ has not made clear how its plans to strengthen the sustainability rules might work in practice. In its Biomass Strategy, published in August 2023, DESNZ committed to develop and consult on a common sustainability framework which could be applied … Read more
Government Response
The government states that providing the KPMG report (requested in point c) is not its responsibility, as the reports belong to Drax and it is up to Drax to release them. The response does not address points 'a' or 'b' of the recommendation regarding cost estimation, effectiveness testing, or resource implications for a new oversight regime.
HM Treasury
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3 Conclusion Rejected
22nd Report - Government’s support…
Include clauses in Drax's transitional support agreement to prompt BECCS transition.
We are not convinced the transitional support agreement between DESNZ and Drax provides good value for money for consumers. Government announced in February 2025 that it had agreed heads of terms for a deal to support Drax that will run … Read more
Government Response
The government disagrees with the recommendation, stating the proposed Drax contract prioritized secure, low-cost electricity supply over BECCS transition. It argues that including BECCS contractual requirements would expose the government to unacceptable legal and cost risks before a full assessment is finalized.
HM Treasury
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4 Conclusion Accepted
22nd Report - Government’s support…
Map critical path for BECCS deployment and develop contingency plans for decarbonisation goals.
The deployment of BECCS has been repeatedly delayed, even though it remains a key part of the government’s plans to decarbonise the UK. The Climate Change Committee (CCC) and DESNZ both see BECCS as essential to the UK achieving its … Read more
Government Response
The government agrees, stating it will publish a report detailing its plan to meet carbon budgets and net zero targets. Additionally, an Independent Review of Greenhouse Gas Removals has been commissioned to assess how technologies like BECCS can assist the UK in achieving these goals.
HM Treasury
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5 Conclusion Accepted
22nd Report - Government’s support…
Develop approach to identify and mitigate risks to domestic and international biomass supply.
There are number of risks to the supply of biomass that need effective management. DESNZ’s Biomass Strategy identified a number of challenges for its use in the future which it needs to manage, including making sure that it has a … Read more
Government Response
The government agrees and states it continuously monitors the biomass supply landscape, including regulatory changes and market dynamics. It emphasizes ongoing reliance on international pellet supply, primarily from the US, as domestic production at a comparable scale is not possible.
HM Treasury
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1 Conclusion Accepted
22nd Report - Government’s support…
Committee took evidence from DESNZ and Ofgem on government’s support for biomass.
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (the Department) and the Office of Gas and Electricity Markets (Ofgem) on the government’s support for biomass.1
Government Response
The government agrees and is reflecting on current evaluation and audit processes to incorporate lessons into future plans, including the new Drax contract. This work will be strengthened by the forthcoming appointment of an independent sustainability advisor.
HM Treasury
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6 Conclusion Acknowledged
22nd Report - Government’s support…
DESNZ holds overall responsibility for biomass strategy, with Ofgem administering financial support schemes.
The Department for Energy Security and Net Zero (DESNZ) has overall responsibility for government’s approach to supporting biomass. In August 2023, DESNZ published its Biomass Strategy setting out the significant role it considers biomass can play in achieving net zero … Read more
Government Response
The government acknowledges DESNZ's overall responsibility for supporting biomass.
HM Treasury
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7 Conclusion
22nd Report - Government’s support…
Stakeholders expressed significant concerns about biomass production impacts, Drax support, and accreditation effectiveness.
We also received a high number of written submissions from stakeholders.8 Particular concerns drawn to our attention included: a. the impact of biomass production on biodiversity, forest stocks and the environment more generally. b. the terms of the agreement for … Read more
HM Treasury
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8 Conclusion
22nd Report - Government’s support…
DESNZ sets sustainability criteria for biomass, but Ofgem does not always require direct evidence.
DESNZ has set two criteria—for land use and with respect to greenhouse gases—for all the schemes that support the use of biomass which require biomass users to demonstrate that the fuel they burn comes from sustainable sources.9 Ofgem administers, on … Read more
HM Treasury
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9 Conclusion Accepted
22nd Report - Government’s support…
Concerns persist regarding the fitness for purpose of biomass sustainability certification schemes.
We are concerned that the certification schemes that are intended to prove that biomass used in the UK is sustainably sourced may not be fit for purpose.12 DESNZ told us that they and Ofgem have benchmarked these third–party certification schemes … Read more
Government Response
The government agrees to complete a comprehensive assessment of its approach to gaining assurance around the sustainability of biomass by Autumn 2025. They will reflect on evaluation and audit processes and incorporate lessons learned into plans for the new Drax contract and Common Framework consultation, and appoint an independent sustainability advisor.
HM Treasury
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10 Conclusion Accepted
22nd Report - Government’s support…
Ofgem found misreporting by Drax, but confirmed legitimate subsidy receipts under existing thresholds.
Ofgem explained that the level of oversight is dictated by the size of the generator.17 At present, the largest recipient of financial support for biomass is Drax, the largest biomass electricity generator by some distance.18 While Ofgem did find misreporting … Read more
Government Response
The government states that Ofgem's investigation into Drax, leading to a £25 million payment, proves the current assurance regime is working well, as breaches are investigated and actions taken.
HM Treasury
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11 Conclusion Accepted
22nd Report - Government’s support…
Concerning non-compliance with sustainability criteria found across numerous biomass power generators.
Ofgem told us that there are 104 biomass power generators with a generating capacity over 1 MW, and which therefore receive the same level of oversight as Drax.22 In the last year, Ofgem found that 17 of these 104 had … Read more
Government Response
The government believes the Ofgem investigation into Drax and the subsequent redress payment demonstrates that the current assurance regime is working well, and breaches are thoroughly investigated and action taken.
HM Treasury
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12 Conclusion Acknowledged
22nd Report - Government’s support…
Consultation on new biomass sustainability framework and 100% target remains delayed.
In its Biomass Strategy, published in August 2023, DESNZ committed to develop and consult on a common sustainability framework which could be applied to all new future biomass schemes across different sectors of the economy. This consultation has yet to … Read more
Government Response
The government has been actively assessing its approach to sustainability assurance as part of a commitment to continuous improvement and to learn from international best practice and evolving international regulatory frameworks.
HM Treasury
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13 Conclusion Deferred
22nd Report - Government’s support…
Ofgem investigation found Drax misreported data due to poor governance, resulting in redress.
In August 2024, Ofgem published the outcome of its investigation into Drax.30 It told us that it had reviewed over 3,000 documents as part of its investigation.31 It also reviewed a report by KPMG, commissioned by Drax, which looked at … Read more
Government Response
The government states that this is not a matter for the government to consider, and it is for Drax to decide whether they wish to release the KPMG reports, adding that Ofgem has already published significant detail.
HM Treasury
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14 Conclusion Acknowledged
22nd Report - Government’s support…
Government agreed Drax deal requiring 100% sustainable fuel, necessitating a tighter assurance regime.
In February 2025, the government announced it had agreed heads of terms for a deal to support Drax that will run from 2027 to 2031. As part of this deal, DESNZ has required Drax to source 100% of its fuel … Read more
Government Response
The government is working with LCCC and Ofgem to develop robust and transparent monitoring arrangements, assessing the cost and resource implications of new requirements, and ensuring Ofgem is appropriately resourced. They expect the independent sustainability advisor to play a role in ensuring the ongoing effectiveness of strengthened sustainability arrangements.
HM Treasury
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15 Conclusion Acknowledged
22nd Report - Government’s support…
Sustainable biomass supply faces limitations, raising concerns about UK energy security.
One of the key themes of the government’s Biomass Strategy concerns the future availability of biomass.39 In 2021, the UK imported 9.1 million tonnes of wood pellets for use in energy production. Around 60% came from the US, 18% from … Read more
Government Response
DESNZ officials continue to monitor the international and domestic biomass supply landscape, but state that international pellet supply will continue to be vital, as UK biomass pellet production at a comparable scale would not be possible.
HM Treasury
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16 Recommendation Accepted
22nd Report - Government’s support…
Domestic biomass production risks conflicting with food security and land availability.
DESNZ noted that global biomass prices would strongly influence how significant a role biomass would play and in what sectors, given that there are several areas in which it can be used.45 Higher biomass prices could encourage a growth in … Read more
Government Response
The government agrees with the recommendation and will monitor the international and domestic biomass supply landscape, ensuring that the government is abreast of changes to regulatory arrangements, market dynamics, and other factors that drive the supply of and demand for pellets.
HM Treasury
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17 Conclusion Acknowledged
22nd Report - Government’s support…
Long biomass supply chains complicate sustainability verification and carbon accounting reliability.
Importing biomass involves long supply chains, which make it difficult to be sure that it is produced from genuinely sustainable sources.50 We are also concerned that recent international developments may undermine the system of carbon accounting that underpins the current … Read more
Government Response
DESNZ officials continue to monitor the international and domestic biomass supply landscape, but state that international pellet supply will continue to be vital, as UK biomass pellet production at a comparable scale would not be possible.
HM Treasury
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18 Conclusion
22nd Report - Government’s support…
Government extends financial support for Drax to secure national energy supply until 2031.
In February 2025, the Minister for Energy issued a statement confirming that the government had agreed heads of terms with Drax power station for financial support between 1 April 2027, when current support arrangements end, and 31 March 2031. The … Read more
HM Treasury
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19 Conclusion
22nd Report - Government’s support…
New Drax agreement aims for reduced operational role and significant subsidy savings.
DESNZ is clear that the agreement is intended to improve on current arrangements. Firstly, Drax will play a smaller role in the power system than it currently does. This means that Drax will receive support for a maximum of 27% … Read more
HM Treasury
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20 Conclusion Rejected
22nd Report - Government’s support…
Bilateral Drax agreement raises value-for-money concerns due to high subsidy rates.
Despite the new terms of the agreement, there are risks that the support will not offer consumers value for money. The agreement was reached through bilateral negotiations with Drax and included no element of competition.56 While the government claims that … Read more
Government Response
The government disagrees, stating that the proposed contract with Drax was intended to secure electricity supply at the lowest cost without the cost of procuring this via the Capacity Market auction, and the CfD framework cannot bind generators to investment decisions beyond the 2027-31 contract term.
HM Treasury
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21 Conclusion
22nd Report - Government’s support…
Prior evidence suggests Drax gamed subsidy system, raising doubts about new agreement robustness.
An investigation conducted by Bloomberg in 2022 concluded that Drax may previously have gamed its support to the detriment of consumers. It found that Drax shut down power generation and sold wood pellets on the open market to avoid paying … Read more
HM Treasury
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22 Conclusion
22nd Report - Government’s support…
New Drax agreement offers limited impact on emissions and lacks BECCS investment incentives.
There are other factors which cast doubt on whether the government has reached a good deal. The new support agreement with Drax reduces the level of allowed supply chain emissions for the fuel it burns, from 55.6 grams of CO2 … Read more
HM Treasury
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23 Conclusion Deferred
22nd Report - Government’s support…
BECCS considered essential for UK decarbonisation, despite reduced projected role by 2050.
Combining power generation using sustainably sourced biomass with carbon capture and storage (CCUS) has the potential to generate ‘negative emissions’–i.e. it could reduce the overall amount of CO2 in the atmosphere.65 Both the government and the Climate Change Committee (CCC), … Read more
Government Response
The government agrees that BECCS is important and states that a forthcoming report, compliant with a High Court Order and the Climate Change Act 2008, will address policies and proposals to meet carbon budgets. They have also commissioned an Independent Review of Greenhouse Gas Removals to consider how BECCS can assist in meeting net zero targets.
HM Treasury
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24 Conclusion Deferred
22nd Report - Government’s support…
Initial BECCS plant target of 2030 will not be met, future support unclear.
The government had initially planned for BECCS plant to begin operating at scale in 2030 as part of its broader CCUS programme.68 However, as the first phase of the CCUS programme (known as Track 1) does not include a BECCS … Read more
Government Response
The government acknowledges the lack of a revised target date for BECCS and states that a forthcoming report, compliant with a High Court Order and the Climate Change Act 2008, will address policies and proposals to meet carbon budgets. They have also commissioned an Independent Review of Greenhouse Gas Removals to consider how BECCS can assist in meeting net zero targets.
HM Treasury
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25 Conclusion Acknowledged
22nd Report - Government’s support…
Uncertainty surrounds government plans for smaller biomass generators to convert to BECCS after 2027.
While much of the debate around biomass has focused on Drax, we received several written submissions outlining the important role played by smaller biomass generators in the UK. There are at present 54 regional biomass power stations that are primarily … Read more
Government Response
The government notes smaller-scale biomass generators can continue to be supplied by a variety of domestically sourced feedstock, but these are not suitable for the technologies currently used by larger-scale generators.
HM Treasury
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Government Response AI assessment · 19 of 2 classified
Accepted 7
Acknowledged 6
Deferred 4
Rejected 2
Total 2 recs + 23 conclusions
Correspondence 5 letters
15 Dec 2025 To committee Letter from the Permanent Secretary at the Department for Energy Security and Net Zero relating to Government support for biomass, 03 December 2025
Parliament page
15 Dec 2025 To committee Letter from the Chair to the Permanent Secretary at the Department for Energy Security and Net Zero relating to Regulation of the biomass industry, 30 October 2025
Parliament page
15 Dec 2025 To committee Letter from the Permanent Secretary at the Department for Energy Security and Net Zero relating to Regulation of the biomass industry, 03 December 2025
Parliament page
27 Mar 2025 To committee Letter from the Chief Sustainability Officer at Drax relating to providing help with the Committee’s recommendations to Government regarding Biomass, 17 March 2025
Parliament page
27 Mar 2025 To committee Letter from the Permanent Secretary of the Department for Energy Security and Net Zero relating to the oral evidence session held on 03 March 2025 on The Government’s Support for Biomass, including additional details on Drax Heads of Terms, 19 March 2025
Parliament page