22nd Report - Government’s support for biomass

Select Committee
Public Accounts Committee HC 715 25 April 2025
Report Status Response document linked

Missing links do not establish that no response was published. A linked document does not verify responses to individual findings.

Conclusions & Recommendations 25 items (2 recs)

No response data available yet.

Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Twenty-second report from Session 2024-25 · published 10 Jul 2025

Recommendations & Conclusions

25 results
2 Recommendation
Estimate cost and test effectiveness of monitoring increased biomass sustainability and Drax's sourcing.
Recommendation
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
HM Treasury
View Details
3 Conclusion
Include clauses in Drax's transitional support agreement to prompt BECCS transition.
Conclusion
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
HM Treasury
View Details
4 Conclusion
Map critical path for BECCS deployment and develop contingency plans for decarbonisation goals.
Conclusion
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
HM Treasury
View Details
5 Conclusion
Develop approach to identify and mitigate risks to domestic and international biomass supply.
Conclusion
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
HM Treasury
View Details
1 Conclusion
Committee took evidence from DESNZ and Ofgem on government’s support for biomass.
Conclusion
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
HM Treasury
View Details
6 Conclusion
DESNZ holds overall responsibility for biomass strategy, with Ofgem administering financial support schemes.
Conclusion
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
HM Treasury
View Details
7 Conclusion
Stakeholders expressed significant concerns about biomass production impacts, Drax support, and accreditation effectiveness.
Conclusion
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
View Details
8 Conclusion
DESNZ sets sustainability criteria for biomass, but Ofgem does not always require direct evidence.
Conclusion
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
View Details
9 Conclusion
Concerns persist regarding the fitness for purpose of biomass sustainability certification schemes.
Conclusion
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
HM Treasury
View Details
10 Conclusion
Ofgem found misreporting by Drax, but confirmed legitimate subsidy receipts under existing thresholds.
Conclusion
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
HM Treasury
View Details
11 Conclusion
Concerning non-compliance with sustainability criteria found across numerous biomass power generators.
Conclusion
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
HM Treasury
View Details
12 Conclusion
Consultation on new biomass sustainability framework and 100% target remains delayed.
Conclusion
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
HM Treasury
View Details
13 Conclusion
Ofgem investigation found Drax misreported data due to poor governance, resulting in redress.
Conclusion
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
HM Treasury
View Details
14 Conclusion
Government agreed Drax deal requiring 100% sustainable fuel, necessitating a tighter assurance regime.
Conclusion
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
HM Treasury
View Details
15 Conclusion
Sustainable biomass supply faces limitations, raising concerns about UK energy security.
Conclusion
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
HM Treasury
View Details
16 Recommendation
Domestic biomass production risks conflicting with food security and land availability.
Recommendation
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
HM Treasury
View Details
17 Conclusion
Long biomass supply chains complicate sustainability verification and carbon accounting reliability.
Conclusion
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
HM Treasury
View Details
18 Conclusion
Government extends financial support for Drax to secure national energy supply until 2031.
Conclusion
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
View Details
19 Conclusion
New Drax agreement aims for reduced operational role and significant subsidy savings.
Conclusion
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
View Details
20 Conclusion
Bilateral Drax agreement raises value-for-money concerns due to high subsidy rates.
Conclusion
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
HM Treasury
View Details
21 Conclusion
Prior evidence suggests Drax gamed subsidy system, raising doubts about new agreement robustness.
Conclusion
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
View Details
22 Conclusion
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 … Read more
HM Treasury
View Details
23 Conclusion
BECCS considered essential for UK decarbonisation, despite reduced projected role by 2050.
Conclusion
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
HM Treasury
View Details
24 Conclusion
Initial BECCS plant target of 2030 will not be met, future support unclear.
Conclusion
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
HM Treasury
View Details
25 Conclusion
Uncertainty surrounds government plans for smaller biomass generators to convert to BECCS after 2027.
Conclusion
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
HM Treasury
View Details