Recommendations & Conclusions
11 items
4
Conclusion
22nd Report - Government’s support for …
Accepted
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 decarbonisation goals from Carbon Budget 6 (2033–37) onwards. Government initially …
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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 decarbonisation goals from Carbon Budget 6 (2033–37) onwards. Government initially planned for the first BECCS plant in the UK to begin operations by 2030. However, this date will not be achieved and government has yet to settle on a new target date. There are no BECCS projects in the first phase of the government’s Carbon Capture, Usage and Storage (CCUS) programme and no clarity over when or if it will be included in later stages. Currently, smaller scale biomass power generators which primarily use waste wood from the UK are excluded from the CCUS programme. It is not clear if these plants will be helped to transition to BECCS. The most recent advice published by the CCC confirms that BECCS will still be needed to achieve net zero by 2050, but only half the amount of BECCS capacity compared to previous forecasts. recommendation DESNZ should map a critical path showing when BECCS needs to be operational for the UK to achieve its decarbonisation goals and take concrete action to meet it. If BECCS is no longer considered to be viable, DESNZ should put in place robust contingency plans setting out how it will achieve the net carbon removals it requires and what the future of biomass will be.
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Government response AI 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.
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HM Treasury
5
Conclusion
22nd Report - Government’s support for …
Accepted
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 secure supply of biomass and that it prioritises its use. …
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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 secure supply of biomass and that it prioritises its use. In 2022, around two–thirds of biomass used in electricity generation, heat and transport was produced from domestic sources, with a third imported. The Department describes itself as agnostic as to whether biomass is sourced domestically or from overseas. However, the Climate Change Committee’s most recent advice, covering Carbon Budget 7, suggests that sustainable biomass will become harder to source on global markets. It therefore expects imports of biomass to have ceased by 2050, with domestic sources providing all the biomass required. But there are competing pressures on land use at home–for example, food production and reforestation. The Department for Environment, Food & Rural Affairs is currently consulting on a ‘Land Use Framework’ which will help inform 6 decisions on how best to use land to meet government’s various priorities. Meanwhile importing biomass involves long supply chains, which makes assuring sustainability criteria are met challenging. Such challenges may be amplified by the USA’s withdrawal from the Paris Agreement. recommendation DESNZ should make sure it has an approach in place for identifying and then mitigating the risks to the supply of biomass, both domestically and internationally. 7 1 Biomass sustainability and supply Introduction
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Government response AI 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.
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HM Treasury
1
Conclusion
22nd Report - Government’s support for …
Accepted
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 AI 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.
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HM Treasury
7
Conclusion
22nd Report - Government’s support for …
Accepted
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 transitional support to Drax power station from 2027 to 2031 …
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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 transitional support to Drax power station from 2027 to 2031 that government recently announced. c. the role played by smaller biomass power stations in the UK in providing heat and power and how they contribute to waste disposal. d. the technical and other challenges in launching BECCS in the UK at the pace and scale assumed by government plans. e. the effectiveness of independent accreditation schemes that confirm whether biomass has been sustainably produced. 4 C&AG’s Report, para 2 5 C&AG’s Report, para 2 6 DESNZ, Biomass Strategy, August 2023 7 C&AG’s Report, para 3 8 Committee of Public Accounts, The Government’s support for Biomass - Written evidence 9 Assuring the sustainability of biomass
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Government response AI 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.
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HM Treasury
8
Conclusion
22nd Report - Government’s support for …
Accepted
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 behalf of DESNZ, most of the schemes that provide financial …
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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 behalf of DESNZ, most of the schemes that provide financial support for biomass in power and heating, including registering participants on to schemes and monitoring compliance with sustainability and other scheme criteria.10 Generators with a capacity of more than 1 megawatt are required to submit monthly data on sustainability to Ofgem. The generator is not required to share with Ofgem evidence to support its monthly submission (but must hold this evidence). Compliance with one of the criteria—land use—can be shown through a recognised certification scheme.11
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Government response AI 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.
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HM Treasury
9
Conclusion
22nd Report - Government’s support for …
Accepted
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 to ensure that they are in line with the sustainability …
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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 to ensure that they are in line with the sustainability criteria.13 We have also received a written submission from Drax setting out how the Sustainable Biomass Programme (SBP), the largest certification scheme, is underpinned by independent audits which conclude on whether suppliers meet the SBP’s standards.14 However, several stakeholders have written to us expressing concern that such schemes are not robust and do not fully account for changes in forest carbon stocks.15 The NAO report concluded that, in the absence of an evaluation of the effectiveness of these arrangements, the government could not demonstrate that its current arrangements are adequate to give it confidence industry is meeting sustainability standards.16
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Government response AI 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, …
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HM Treasury
10
Conclusion
22nd Report - Government’s support for …
Accepted
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 in Drax’s 2021–22 annual returns, Ofgem told us that these …
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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 in Drax’s 2021–22 annual returns, Ofgem told us that these breaches did not mean that Drax received subsidies 9 C&AG’s Report, para 1.6, 2.8 10 C&AG’s Report, para 1.15 11 C&AG’s Report, para 2.11 12 Q 4 13 Q 4 14 Letter from Drax, 17 March 2025 15 Bio0012, Bio0022 16 C&AG’s Report, paras 12 and 16 17 Q 19 18 C&AG’s Report, para 8 10 to which it was not entitled.19 Ofgem added that the subsidies received by Drax are based on “an enhanced assurance scheme” and that it was “very confident” the funding that Drax received was in line with the current threshold that 70% of woody biomass should be from sustainable sources.20 DESNZ was unable to say whether this would have been the case if a threshold of 100% sustainable biomass, which will apply to Drax and which is being considered more widely, had been in place.21
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Government response AI 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.
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HM Treasury
11
Conclusion
22nd Report - Government’s support for …
Accepted
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 breached the support scheme’s sustainability criteria.23 While these non–compliant generators …
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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 breached the support scheme’s sustainability criteria.23 While these non–compliant generators accounted for less than 1% of the power generated by biomass as part of the Renewables Obligation scheme, this level of non–compliance is concerning.24 Strengthening the sustainability rules
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Government response AI 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.
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HM Treasury
16
Recommendation
22nd Report - Government’s support for …
Accepted
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 domestic production, but this could reduce the amount of land …
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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 domestic production, but this could reduce the amount of land available for food production in the UK.46 The Department for Environment, Food & Rural Affairs is currently consulting on this issue in advance of producing a ‘land use framework’. which will look at how to reduce the risk of competition between biomass production and food production.47 For example, the government has committed to at least maintain current levels of UK food production and to achieve a degree of reforestation by 2050, both of which will reduce land availability for growing biomass feedstocks.48 We heard from stakeholders that there is a need for a more pragmatic approach to promoting domestic biomass production and that biomass can be cultivated on marginal land that is not used for food production.49
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Government response AI 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.
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HM Treasury
21
Conclusion
22nd Report - Government’s support for …
Accepted
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 back £639 million of subsidies as wholesale electricity prices spiked. …
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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 back £639 million of subsidies as wholesale electricity prices spiked. Although DESNZ reassured us that the new arrangements will be more robust, it did not offer any explanation of how it had made sure that there would be no loopholes that allow Drax to continue to game the system.59
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Government response AI 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.
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HM Treasury
22
Conclusion
22nd Report - Government’s support for …
Accepted
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 …
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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
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Government response AI 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.
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HM Treasury