Canada should avoid the mistakes the U.K. made in biomass for energy

This article was published by Policy Options on April 9, 2024.

By Bertie Harrison-Broninski, Richard Robertson

Two years ago, BBC journalists visited Canada to investigate the wood pellet industry. Their findings, broadcast in the documentary Drax: The Green Energy Scandal exposed, sent shockwaves through climate politics in the U.K.

Both the BBC and the CBC’s Fifth Estate – in a separate documentary called The Big Burn –reported that energy company Drax Power was shipping wood from rare, previously unlogged forests in British Columbia across the North Atlantic to be burned as fuel for the United Kingdom’s largest electric power station.

At the same time, the company received hundreds of millions of pounds a year in U.K. green subsidies.

In February 2024, the BBC published a follow-up story highlighting claims Drax had continued burning wood from these ecologically important forests in 2023. The reporters documented the use of tens of thousands of tonnes sourced from forests which are designated by the B.C. government as critical areas where logging should be avoided.

Drax did not dispute these findings or that it is still sourcing wood from old-growth forests, but it claimed to be undertaking work to stop sourcing wood from official “old-growth priority deferral areas.”

Both Drax and the U.K. energy ministry have faced regulatory audits and investigations, as well as parliamentary scrutiny, prompting renewed debate about whether to continue the subsidies.

However, it is primarily up to Canadian authorities, not foreign nations, to investigate and regulate the country’s biomass industry.

Ottawa should exclude the utility-scale wood pellet industry from federal funding of forestry programs because much of it is already subsidized by other countries. The B.C. government must toughen environmental law enforcement, particularly in regard to the rarest, or “old-growth,” forests.

Where to count emissions?

Drax Power began burning wood instead of coal in 2012 and fully phased out fossil fuels last year. The power plant remains the U.K.’s largest source of carbon dioxide pollution, but controversial international rules mean that if the wood is sourced from abroad, no emissions need to be counted in Britain.

The British government officially considers Drax’s power carbon neutral, although hundreds of scientists recently argued that there is an urgent need to stop burning forest wood for energy because it undermines international climate and nature targets. Instead, clean energy such as wind and solar should be used, they say.

Even Drax’s own scientific advisers recommended that the company stop using the term “carbon neutral.”

British politicians have become increasingly concerned that their renewable energy subsidies are being spent on greenwashing. An investigation by the country’s National Audit Office recently concluded that the government cannot demonstrate that its biomass supply chains are sustainable.

A separate investigation by the state energy regulator into Drax’s compliance with the subsidy scheme is ongoing.

Parliamentarians from the Conservative, Labour, Green, Scottish National and Liberal Democrat parties have all raised concerns about publicly funding Drax’s supply chain.

This includes two of the country’s last three energy ministers. Kwasi Kwarteng was recorded admitting that Drax’s supply chain “is not sustainable” and “doesn’t make any sense,” while Jacob Reese-Mogg went further, publicly describing Drax’s “ridiculous” carbon accounting as “barmy in-Wonderland stuff.”

The ball is in Canada’s court

Despite this, British authorities do not have the resources to effectively monitor biomass sourcing in foreign countries, as the National Audit Office has made clear.

Instead, the government relies on forestry laws in source countries and third-party certification schemes to check sustainability compliance.

Source countries such as Canada profit from industrial logging, leading to concerns about conflicts of interest with regulatory enforcement. Certification schemes are based on risk assessment rather than verifying that sustainable wood is used and do not cover all forests where biomass fuel is sourced.

Drax is currently waiting on the U.K. government for two stalled funding decisions – one about renewing its bioenergy subsidy when its funding contract expires in 2027 and a second about adding carbon capture technology to the plant.

Right now, it’s a lose-lose decision for the U.K. government – continue funding a controversial and expensive power plant or lose a large source of supposedly carbon-neutral power.

Academics and environmental organizations, including in Canada, have written to British ministers with concerns about continuing subsidies.

This may not be enough. As long as these certifiers and Canadian authorities agree that Drax’s forest practices are sustainable and legally compliant, criticism from the British parliament and independent experts may not justify the U.K. government rethinking a major part of its decarbonization strategy.

Public funding subsidizes Drax’s empire

Public funding from both countries has enabled Drax to build a sizeable wood pellet empire in Canada.