The government cannot be confident that biomass plants such as Drax are meeting sustainability standards, the National Audit Office (NAO) has warned.
A new report published by the watchdog raises questions over £22 billion of government subsidies awarded to biomass plants between 2002 and 2023, with Drax receiving the lion’s share at £6.5 billion.
Of the total funding awarded around £16 billion has come from consumer-funded support, with £14 billion coming from the Renewables Obligation (RO) scheme, and £2 billion coming from Contracts for Difference (CfD).
As the largest biomass electricity generator, £5.1 billion (36%) of the RO funding has gone to Drax, which has also received net CfD payments of £1.4 billion while a second large power station, Lynemouth, has received £0.6 billion.
Both the government and Climate Change Committee (CCC) considers biomass to be low-carbon if generators adhere to sustainability criteria which is set by government and monitored by energy regulator Ofgem.
The government’s monitoring process relies on a combination of information provided by generators, third-party certification schemes and limited-assurance audit reports. Yet the NAO has concerns about the arrangements.
It said: “DESNZ considers this a proportionate approach that provides it sufficient confidence in the credibility of the sustainability criteria for existing schemes.
“But in our view the lack of an evaluation of how effective these arrangements have been, particularly given the long supply chains involved, means the government cannot demonstrate that its current arrangements are adequate to give it confidence industry is meeting sustainability standards.”
The report concludes that the government must undertake a review of the assurance arrangements for these schemes, “including ensuring that it has sufficient resources to give it assurance over the billions of pounds involved”.
“It should apply the lessons from its experience to date to make sure it has clarity about the roles, responsibilities and effectiveness of the different organisations that provide assurance around sustainability.
“Doing so will enable it to understand how its assurance approach will need to adapt to support its plans to strengthen sustainability criteria, and in response to increasing global demand for biomass.”
Commenting on the report Gareth Davies, head of the NAO, said: “If biomass is going to play a key role in the transition to net zero, the government needs to be confident that the industry is meeting high sustainability standards.
“However, government has been unable to demonstrate its current assurances are adequate to provide confidence in this regard.
“Government must review the assurance arrangements for these schemes, including ensuring that it has provided adequate resources to give it assurance over the billions of pounds involved.”
A Drax spokesperson said: “The NAO acknowledges the important role that sustainably sourced biomass has to play in addressing the climate crisis and displacing fossil fuels in the production of dispatchable electricity.
“It’s essential that sustainability reporting and criteria are robust and fit for purpose. This was also recognised in the government’s biomass strategy published last year, which outlined a review which has already begun.
“We fully support that a review process should be carried out and look forward to playing our part and working with government in this.
“We are committed to ensuring the biomass we source delivers positive outcomes for the climate, for nature and for the communities in which we operate.”
A DESNZ spokesperson said: “We welcome the NAO’s report, which found no evidence of firms not complying with our stringent sustainability criteria, which are in line with internationally-recognised standards.
“As set out in the Biomass Strategy, we will be consulting later this year on how we can go further than our peers.
“Biomass will provide a key role in a more secure, clean energy sector. It delivered around 9% of the UK’s total energy supply in 2022, with generators only legally receiving subsidies if they prove they have complied with our strict rules.
“The Climate Change Committee has acknowledged that achieving net zero is dependent on solutions like bioenergy with carbon capture and storage, which will help offset emissions from other industries.”
It comes as energy secretary Claire Coutinho recently gave the green light for bioenergy with carbon capture and storage (BECCS) operations at Drax Power Station.
The company has secured a development consent order (DCO) for the £2 billion project, paving the way for construction to begin.
Meanwhile proposals outlined in a government consultation for an extension to biomass subsidies at Drax have been slammed by politicians, environmental groups and climate campaigners.
The consultation moots a bridging support mechanism for large-scale biomass generators, including Drax Power Station, as they transition from the end of their current renewable schemes in 2027 to BECCS.
Yet the announcement faced a stiff backlash just hours after it was launched.
Conservative MP and Father of the House, Sir Peter Bottomley, criticised the decision and said those who “claim biomass at-scale can be ‘renewable’ are ignorant at best, fraudulent at worst”.