Drax at a glance

We are committed to enabling a zero carbon, lower cost energy future. Our strategic aims are to be a UK leader in flexible, renewable generation, and a global leader in both sustainable biomass pellets and carbon removals.

The world is continuing to navigate a complex interplay of technological, geopolitical, environmental, and social factors, requiring global co-operation and innovative solutions.

The energy sector continues to underpin modern society, providing the essential energy resources that power our homes, industries, and transportation networks. There is a growing global consensus behind the need for action on climate change, a Just Transition, and greater focus on sustainability. At the same time, there is concern about the cost and implications of the transition and a growing recognition that in order for businesses to be sustainable they must also be profitable.

Political change

Our principal geographies experienced a change in political leadership in 2024. In the UK, having campaigned in the July 2024 election with a manifesto pledging to “accelerate to net zero”, the Labour Government recognised that it has a lot to do if it wants to keep that promise. It has renewed Britain’s climate change targets with an ambitious goal of a clean energy system by 2030. In the US, the election of a new president has led to concerns about a potential move away from renewables but also a focus on energy security. Drax has significant business interests in many Republican states in the US South which have active forest economies and have benefitted from the investment initiated by the previous administration.

FlexGen and Biomass Generation – energy security and decarbonisation. In the years since the Ukraine-Russia war started, energy security has remained a priority, with countries and organisations facing a tough balancing act between energy security and cutting emissions. Drax has continued to play an important role in preserving the UK’s energy security. In 2024 across its pumped storage, hydro, and biomass assets, Drax provided 10% of the UK’s renewable power, and Drax Power Station in North Yorkshire was the largest single source of renewable power in the UK.

Pellet Production

The forest products industry is a major global industry providing products which we all consume across a global supply chain. Within that, the pellet production industry is a small part of this much larger system, utilising lower value residuals from the forest products industry. The global pellet market totals over 40Mt of demand each year, which we believe will grow. As well as the current market of generation and heating, we see growth opportunities including Sustainable Aviation Fuel (SAF), where Drax is developing a pipeline of biomass sales opportunities in North America and Europe.

The growing global role of BECCS and Carbon Dioxide Removal (CDR)

Without immediate action to cut emissions, protect ecosystems, and deploy scalable carbon removal technologies, climate change – with more frequent extreme weather and rising sea levels – could reduce global GDP by up to 14% and displace up to 1.2 billion people as climate refugees by 2050.

The Intergovernmental Panel on Climate Change (IPCC), the world’s leading authority on climate science, states that CDR methods, including BECCS, are needed to mitigate residual emissions and keep the world on a pathway to limit warming to 1.5°C. The illustrative mitigation pathways assessed by the IPCC use significant volumes of CDRs, including BECCS, as a tool for mitigating climate change. IPCC modelling shows that between 0.5 and 9.5 billion tonnes of CDRs, via BECCS, could be required annually by 2050 to reach global net zero targets. The UN-backed Principles for Responsible Investment estimate that the CDR market could be worth up to 1.2 trillion dollars by 2050. More supply is required to meet the scale of the challenge, and the IPCC has assessed that globally up to 9.5 billion tonnes of CDRs from BECCS could be required per year by 2050.