22nd Report - Government’s support for biomass
Select Committee
Public Accounts Committee
HC 715
25 April 2025
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
11 results
4
Conclusion
Accepted
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 …
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Government Response Summary
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
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 …
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Government Response Summary
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
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
Government Response Summary
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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7
Conclusion
Accepted
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 …
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Government Response Summary
The government agrees with the (implied) recommendations, committing to strengthening its sustainability assurance approach, incorporating lessons into the new Drax contract, appointing an independent sustainability advisor by Autumn 2025, and considering publishing sustainability enforcement plans by December 2025.
HM Treasury
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8
Conclusion
Accepted
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 …
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Government Response Summary
The government agrees with the (implied) recommendations, committing to strengthening its sustainability assurance approach, incorporating lessons into the new Drax contract, appointing an independent sustainability advisor by Autumn 2025, and considering publishing sustainability enforcement plans by December 2025.
HM Treasury
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9
Conclusion
Accepted
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 …
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Government Response Summary
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
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 …
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Government Response Summary
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
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 …
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Government Response Summary
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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16
Recommendation
Accepted
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 …
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Government Response Summary
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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21
Conclusion
Accepted
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 …
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Government Response Summary
The government agrees with the recommendation and is considering options to publish the plans for sustainability enforcement under the new Drax contract by December 2025, also working closely with Ofgem and LCCC on sustainability assurance roles.
HM Treasury
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22
Conclusion
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 …
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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.
HM Treasury
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