Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Deferred
Estimate cost and test effectiveness of monitoring increased biomass sustainability and Drax's sourcing.
Recommendation
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
Government Response 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 estimation, effectiveness testing, or resource implications for a new oversight regime.
Government Response
Deferred
HM Government
Deferred
This is not a matter for the government to consider. The reports remain the property of Drax, and the government does not hold them. DESNZ officials were given temporary access to them to understand issues that have arisen in Drax’s supply chain processes and reporting, but it is important to recognise that the KPMG reports were commissioned by Drax as a confidential internal fact-finding exercise. It is therefore for Drax to decide whether they wish to release them to Parliament or the public. Ofgem has already published significant detail as to how this was considered as part of their investigation: Ofgem statement: Drax investigation and renewables obligation subsidies.