Despite a torrent of evidence that Drax’s tree-burning power station in Yorkshire is contributing to forest destruction and accelerating climate change, the UK Government seems determined to keep providing subsidies to the company. On February 10, the Government announced both a general support scheme for large-scale biomass generators, and a specific agreement in principle with Drax Power Ltd for support running from 2027 to 2031 (the Heads of Terms, or HoT). The support is to be in the form of a Contract for Difference (CfD), a subsidy scheme that makes payments to Drax when the price they receive for electricity falls below a certain level.

The content and timing of these announcements raised significant doubts and questions. Accordingly, The Lifescape Project sent two letters to the Government flagging concerns and requesting more information. One of the key issues was, was the Government’s announcement, which included the HoT, in essence a pre-determined decision to award Drax a new CfD?  This appeared to be the case, since the HoT had been agreed prior to Drax being found to meet supposedly strict eligibility assessments included in Government’s general support announcement.

In response to Lifescape’s questions, the Government brought out its A-team at the Government Legal Department (GLD) to pen two letters dense with reasons and justifications for their actions.

The letters are significant: they shed light on the Government’s decision-making process and the significance of Drax’s Heads of Terms. But unsurprisingly, a close read reveals many ambiguities.

The Government’s letters naturally state that the Heads of Terms are not legally binding. According to the GLD, Drax has no “expectation or reliance” on entering a final CfD. They also state there has been “no pre-determination” that Drax will meet all the necessary eligibility criteria and satisfy the assessments. A final decision will not be made until all factors, including value for money, sustainability, and subsidy control assessments, have been completed. Moreover, when questioned as to whether alternative arrangements were fully considered in case the new contract with Drax cannot be finalized, the Government states it has indeed considered gas and other alternatives.

But reading the actual letter, despite its protestations that the jury is still out, we get the feeling that much of the work has been done, and that the decision has been effectively made (point 6, in particular, indicates the direction of travel):

The “sustainability work” that has been “carried out” does not, however, include application of sustainability criteria that are to constitute a new “common framework”, because those new criteria have not yet been developed.  The Government says it will be consulting on new criteria this year. The GLD states that it envisions a CfD agreement with Drax being concluded before the consultation on revising sustainability criteria is even finished. GLD implies that afterward, they might amend Drax’s contract to require compliance with any new criteria, though “a variety of factors” will be taken into account before they make that decision.

Meanwhile, the Government is requiring Drax to comply with certain new criteria that seem expressly intended to ensure that Drax can continue business-as-usual.

“Reducing” the GHG emission threshold to 36.6 g CO₂/MJ

The biomass GHG criteria are expressed as grams of CO₂ allowed to be emitted per mega-joule (a unit of energy) of electricity generated at the biomass power plant, but the standard only counts CO₂ from fossil fuels burned during biomass harvesting, pellet manufacturing, and transport, not the far greater emissions of “forest” CO₂ from logging and burning wood, which adds millions of tonnes of CO₂ to the atmosphere each year. The so-called reduction of the  threshold won’t require Drax to do anything at all, since the company is already meeting this level, and has been for years.

No subsidies for electricity generated by burning pellets made from old-growth forests or primary forests.

The current biomass criteria allow burning wood from primary/old-growth forests, but officials have refused to acknowledge this and have actually published misleading information stating this wood is prohibited. for example, p. 69 of the Biomass Strategy:

“Our existing biomass sustainability criteria include requirements to include GHG emissions or removals associated with direct land use change in the GHG emissions calculations and to prevent sourcing that adversely impacts areas with high biodiversity value or high carbon stocks, such as primary forest, protected areas, peatlands, and wetlands.”

The new announcement means that going forward, Drax won’t get UK subsidies if it burns this wood, but there is nothing stopping Drax from continuing to sell pellets made from old-growth/primary forest wood in other countries, or to burn those pellets in the UK and sell the electricity directly (without subsidies) to third parties like data centres. Indeed, Drax is lobbying the Canadian government to ensure it will continue to be able to log primary forests.

Further, it appears Drax will get 80% of its wood that it burns under the new agreement from the US. While many of the forests logged for pellets do indeed contain huge, old trees, they are not classified as “old-growth” or “primary” forests – so nothing about the new restrictions will prevent Drax from continuing to source pellets from these forests.

Also continuing the status quo, despite their claims in the Biomass Strategy (above) DESNZ has in reality done nothing to “de-subsidize” wood from the other types of rare ecosystems that are off limits to biofuel production (and that the EU has now put fully off limits for forest biomass production): wetlands, peatlands, protected areas, and highly biodiverse grasslands.

But none of the requirements on Drax will really decrease the damage that burning wood pellets does to forests and the climate.

As for actual verification of what Drax burns, it’s likely there won’t be any. The GLD implies the Government will be checking to see what Drax burns, stating in one of the letters that Drax “will be in breach of the contract and [its] eligibility for support payments will be reduced in direct proportion to any use of fuel from primary or old growth forests that is identified by the CfD Counterparty.”

As the Government is the “CfD Counterparty”, this suggests the Government will be checking, but in fact it’s unlikely the Government will itself “identify” anything about what Drax burns, because the entire system relies on self-reporting by Drax. Elsewhere, the Government has in fact been explicit that they have no intention of checking on forest harvesting or pellet manufacturing – see, for instance, Clip 1 at this overview of Parliamentary interviews of Government officials, where Jeremy Pocklington, Permanent Secretary of DESNZ, talks about the difficulty of actually monitoring what Drax burns. Likewise, Ofgem’s representative at that hearing stated “Ofgem’s role is not to conduct a forensic analysis” of self-reported data, but instead to provide “spot-checks.”

As to the appointment of Alan Whitehead, an outspoken biomass proponent in the past, to chair a supposedly independent review of greenhouse gas removal technologies (including BECCS), the GLD letter states that there’s no risk of bias, defensively discounting his past statements.

Overall, the GLD letters perform their normal task of obfuscating government process and decision-making. But with ever-more attention on Drax, and the recent publication of a highly critical report from Parliament on the Drax agreement, Government officials working on Drax must know they’re under a microscope.

 

Featured Photo © Copyright Chris Allen and licensed for reuse under a cc-by-sa/2.0 Creative Commons Licence.