Is biomass sustainably sourced? Risk that sector is marking its own homework, PAC warns

There is a risk that biomass generators are marking their own homework on sustainability. In its report on Government support for biomass, the Public Accounts Committee raises concerns that the certification schemes intended to prove that biomass used in the UK is sustainably sourced may not be strong enough.

Some £22bn of government support has been provided to businesses and households using biomass for fuel since 2022, including £6.5bn for biggest single recipient Drax. Biomass is seen by government as a low-carbon alternative to fossil fuels provided it's sustainably sourced, and when used in combination with carbon capture and storage technology (BECCS*) is seen as essential to the achievement of net zero for the UK. However, questions and concerns have been raised around biomass causing significant environmental harm and whether it can genuinely be considered a low-carbon fuel.

The PAC's report finds that government has for too long relied on an untested approach to make sure biomass generators are meeting sustainability criteria in return for receiving financial support. Current arrangements rely heavily on self-reporting and third-party schemes, and neither the Department for Energy Security and Net Zero (DESNZ) or regulator Ofgem know whether this is effective in ensuring biomass' sustainability.

The report recommends that, 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. BECCS deployment has been repeatedly delayed, despite remaining a key part of decarbonisation plans. Government has yet to settle on a target date for the UK's first BECCS plant, which will not be achieved by the original target of 2030, and there are no BECCS projects in the first phase of the government's carbon capture, usage and storage programme.

Government committed in 2023 to strengthening sustainability rules to specify that 100% of woody biomass should be sustainable rather than the current 70% - but DESNZ has not made clear how this will work in practice. It did acknowledge to the PAC that an increase in resources to monitor compliance may be required, as indicated by Ofgem's recent investigation into Drax.  Significant public concerns were raised in relation to the findings of the KPMG review commissioned by Drax into its Canadian supply chain processes and reporting practices, and the PAC recommends Drax provide it the full report for Parliamentary scrutiny.

Heads of terms for a new support package were announced for Drax in February 2025. The report identifies risks that the provisional new deal may not provide good value for money. Under the deal, Drax will only be supported to operate less than half the time it currently is, saving each household an estimated c.£6/yr. DESNZ expects the agreement to reduce the amount of subsidy that Drax receives each year by £170 million compared to the alternative of procuring gas and includes a claw-back provision for profits over a certain level. The new agreement also insists on all Drax's biomass coming from 100% sustainable sources. Under the provisional new deal – which lacks any element of competition – Drax will receive a higher unit price than other renewable generators. The report calls for DESNZ to consider how it can update the agreement to prompt Drax to begin transitioning to BECCS.

Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said: “Billions upon billions of government support has been provided to the biomass sector over the past two decades. Rather than taking it on faith that the woody biomass burnt for energy is a sustainably sourced low-carbon alternative fuel, it is long past time a true assay was made of what taxpayers are getting for their money. Our report also raises further questions around what role will be played by BECCS, long-viewed as crucial for net zero but with no movement visible on the horizon to start to build it into the UK's infrastructure.

“In light of the continuing concerns raised around biomass highlighted by our written evidence, gaining full confidence around the sector's supply chains is work that must be carried out if government is to truly satisfy itself that biomass is not a white elephant. All are agreed that further monitoring of the sustainability of biomass will require government to devote more resources to the problem. This was demonstrated by Ofgem's recent own investigation into Drax. We hope that Drax will agree with the need for Parliamentary scrutiny of the findings of the review into its supply chain and reporting practices, and to supply this review to our Committee.

“Under current carbon accounting rules, CO2 emissions are accounted for in the current country of origin, not in the country that actually burns the biomass. This is an approach this Committee were extremely critical of in our report on carbon capture, usage and storage, and many members of the public will find this inexplicable.”

Notes to editors

*BECCS = Bioenergy with Carbon Capture and Storage

The PAC's inquiry received a high number of written submissions from stakeholders. Particular concerns drawn to the PAC's attention included:

1. a) the impact of biomass production on biodiversity, forest stocks and the environment more generally.
2. b) the terms of the agreement for transitional support to Drax power station from 2027 to 2031 that government recently announced.
3. c) the role played by smaller biomass power stations in the UK in providing heat and power and how they contribute to waste disposal.
4. d) the technical and other challenges in launching BECCS in the UK at the pace and scale assumed by government plans.
5. e) the effectiveness of independent accreditation schemes that confirm whether biomass has been sustainably produced.

The Committee published its Carbon capture, usage and storage report, which found a high degree of uncertainty on whether this risky investment by Government would pay off, on 7 February 2025.

PAC report conclusions and recommendations 

DESNZ has relied for too long on an untested approach to ensure biomass generators are meeting sustainability criteria for receiving financial support. DESNZ sets the sustainability criteria for biomass and the approach to making sure generators meet these criteria; Ofgem is responsible for implementing the assurance regime. The current approach relies heavily on generators self-reporting the sustainability of the biomass they use and third-party certification schemes, giving a sense that generators are marking their own homework. Neither DESNZ nor Ofgem know whether the approach to assurance is effective in making sure biomass is from sustainable sources.  They have only recently started to look in depth at this issue when prompted to do so by the investigation into Drax and the NAO's report. While the focus on Drax is understandable given its size, DESNZ and Ofgem lacks an understanding of compliance issues across generators. Ofgem seemed confident that the current threshold that 70% of woody biomass sustainable has been met, but did not present concrete evidence to back this up.

Recommendation 1.   DESNZ should complete a comprehensive assessment of the strength of its current approach to gaining assurance around the sustainability of biomass.

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 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 2.

(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 and reporting practices, from the forests of Western Canada to the power station in North Yorkshire. 

We are not convinced the transitional support agreement between DESNZ and Drax provides good value for money for consumers. Government announced in February 2025 that it had agreed heads of terms for a deal to support Drax that will run from 2027 to 2031. The new support package means Drax will only be supported to operate for a maximum of 27% of the time, meaning that Drax will be operating less than half as often as it currently does. Government estimates that this will save each household around £6 a year. However, there was no element of competition in reaching this agreement and Drax will receive a higher unit price, albeit for a more flexible type of power, than some renewable power generators that won their contracts through competitive auctions. There have been suggestions that the current contractual arrangements may have allowed Drax to avoid making repayments to the government. The new agreement also requires Drax to source 100% of its fuel from sustainable sources (an increase on the current requirement of 70% which applies to all generators). The government has missed an opportunity to incentivise continued investment in BECCS in its transitional deal with Drax, which includes no mention of BECCS. Indeed, there have been recent press reports that Drax is withdrawing funding from carbon capture.

Recommendation 3. DESNZ should also consider how it can include clauses into the transitional support agreement to prompt Drax to begin transitioning to BECCS.

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 4. 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.

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 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 5. 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.