22 Accepted

New Drax agreement offers limited impact on emissions and lacks BECCS investment incentives.

Conclusion
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 per megajoule to 36.6 grams.60 While DESNZ said that this is in line with international best practice, historically Drax has achieved supply chain emissions below this new level so it is not clear if this change will have any effect.61 We also note that the agreement does not appear to include any incentives or requirements for Drax to continue investment in BECCS.62 This is particularly concerning given recent news reports that Drax is ceasing investment in a company that is intended to speed up the development of carbon capture and storage.63 ‘DESNZ told us it made the agreement with Drax principally to ensure security of supply, following the advice of its national energy system operator.64 The future of BECCS in the UK
Government Response Summary
The government agrees with the recommendation and will work with LCCC and Ofgem by Autumn 2025 to develop robust, transparent monitoring arrangements for new sustainability criteria, ensuring Ofgem is appropriately resourced.
Government Response
Accepted
HM Government Accepted
The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2025 As part of the planning for the implementation of the new sustainability criteria, the department is working closely with LCCC and Ofgem to develop robust, transparent monitoring arrangements. This includes assessing the cost and resource implications of any new or strengthened thresholds and Monitoring, Reporting and Verification (MRV) requirements, and ensuring that these are proportionate and represent value for money. In particular, the department is committed to ensuring that Ofgem is appropriately resourced to deliver its ongoing support for the assurance of biomass sustainability. DESNZ also expects the independent sustainability advisor to play a role in ensuring the ongoing effectiveness of these strengthened sustainability arrangements.
Addressee Bodies
HM Treasury
Timeline
Recommendation age 1.3 yr
Report published 25 Apr 2025