Recommendations & Conclusions
4 items
2
Recommendation
22nd Report - Government’s support for …
Deferred
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 to new future biomass policies and schemes across different sectors …
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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 to new future biomass policies and schemes across different sectors of the economy. It also committed to considering whether it should introduce a requirement that, to meet the standards for the land criteria, 100% of woody biomass should be sustainable rather than the current 70%. DESNZ acknowledges that a new approach to assurance is needed and that increasing the stringency of rules around sustainability may need an increase in resources to monitor compliance. Ofgem’s investigation into Drax, together with the detailed follow up work, indicates the level of resources which may be required to provide a higher level of assurance. Ofgem’s ability to provide assurance 4 over higher standards of sustainability will depend on increases in financial support from DESNZ and HM Treasury. Given the significant public concerns raised in relation to the findings of the KPMG review commissioned by Drax into its Canadian supply chain processes and reporting practices, from the forests of Western Canada to the power station in North Yorkshire, the full report should be made available for Parliamentary scrutiny. recommendation a. DESNZ should estimate the cost and test the effectiveness of its proposals for monitoring compliance against an increased threshold for sustainability; b. DESNZ and HM Treasury should, working with Ofgem, consider the resource implications for Ofgem of introducing and then running a new oversight regime. DESNZ should set out, and publish, the steps it is taking to make sure it has the confidence that all the fuel burned at Drax is sustainably sourced; and c. Drax should provide the Committee with the full report as produced following the review commissioned from KPMG of its Canadian supply chain processes a
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Government response AI summary
The government states that providing the KPMG report (requested in point c) is not its responsibility, as the reports belong to Drax and it is up to Drax to release them. The response does not address points 'a' or 'b' of the recommendation regarding cost …
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HM Treasury
13
Conclusion
22nd Report - Government’s support for …
Deferred
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 its Canadian supply chain processes and reporting practices, from the …
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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 its Canadian supply chain processes and reporting practices, from the forests of Western Canada to the power station in North Yorkshire.32 Ofgem concluded following its review of the KPMG report, that it was “content there were no points of illegality raised in there and no evidence that would suggest that Drax was wrong to receive its subsidies”. It also recognised that the report had been the “subject of intense interest”.33 Ofgem’s wider investigation. It concluded that an absence of adequate data governance and controls had contributed to Drax misreporting data and its inability to provide Ofgem with sufficient data to support a number of its submissions.34 Drax has accepted Ofgem’s findings and is making what Ofgem called a £25 million “redress payment”. Drax is also resubmitting its data for the period under investigation and is completing what Ofgem called “the most comprehensive audit of all of its biomass supply chain”.35
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Government response AI summary
The government states that this is not a matter for the government to consider, and it is for Drax to decide whether they wish to release the KPMG reports, adding that Ofgem has already published significant detail.
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HM Treasury
23
Conclusion
22nd Report - Government’s support for …
Deferred
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), which advises the government on how best to achieve its …
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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), which advises the government on how best to achieve its decarbonisation goals, believe that BECCS will be essential for the UK 58 Letter from Drax, 17 March 2025 59 Q 42 60 Q 3 61 Q 3 and Drax Power, Response to CCC Bioenergy Review: call for evidence, December 2018, p 1 62 Q 71 63 Q 1 64 Q 71 65 C&AG’s Report, para 2 16 to achieve its decarbonisation goals from Carbon Budget 6 and beyond.66 The CCC recently provided new advice to government, which set out a reduced role for BECCS in 2050 compared to its earlier forecasts, but does still see BECCS as an essential part of the UK’s decarbonisation efforts by generating 25 million tonnes of negative carbon emissions per year (roughly half the amount suggested in its previous advice).67
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Government response AI summary
The government agrees that BECCS is important and states that a forthcoming report, compliant with a High Court Order and the Climate Change Act 2008, will address policies and proposals to meet carbon budgets. They have also commissioned an Independent Review of Greenhouse Gas Removals …
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HM Treasury
24
Conclusion
22nd Report - Government’s support for …
Deferred
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 plant, this target date will not how be achieved.69 DESNZ …
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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 plant, this target date will not how be achieved.69 DESNZ has not set a revised target date and it is not clear whether a BECCS plant will be supported in a later phase of the CCUS programme.70
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Government response AI summary
The government acknowledges the lack of a revised target date for BECCS and states that a forthcoming report, compliant with a High Court Order and the Climate Change Act 2008, will address policies and proposals to meet carbon budgets. They have also commissioned an Independent …
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HM Treasury