Is Drax's financial support from UK Govt unlawful?
Following a joint complaint by Friends of the Earth and Bristol Community Energy Limited, the European Commission (EC) has confirmed that it’s investigating financial support provided by the UK Government for the electricity firm’s project to convert from coal to biomass.
In April 2013, HM Treasury issued a guarantee underpinning Drax Group plc’s £75 million loan facility with Friends Life to finance the conversion of three of the six generating units at the Drax Power Station at Selby, North Yorkshire into burning biomass. Friends of the Earth believes that the Drax guarantee is unlawful on the grounds that the UK has infringed European Union laws on state aid.
Late last week the EC finally got a response from the UK Government to its questions about the agreement. If the Commission then decides to open a formal investigation, Drax’s aim to be 50 per cent biomass fuelled by 2016 could be in jeopardy.
Friends of the Earth Bioenergy Campaigner Kenneth Richter said:
“Drax’s hunger for burning trees in its power stations is threating global forests and the climate.
“Government support for infrastructure projects is essential but only for the right sort of projects – those that help us reduce our impact on the planet and meet legally binding climate targets.
“When the Government decides to prop up the conversion of a behemoth like Drax into a forest-destroying biomass plant, it must take all the necessary steps to comply with EU law and should therefore be subject to full investigation by the European Commission.”
Notes to Editor:
1. Under European rules, member states are required to notify the European Commission before they intend to give financial support to particular businesses. The Treasury has not done this for the conversion of Drax to biomass. This is unacceptable for a technology as controversial and environmentally damaging as biomass generation on such a massive scale.
2. Drax’s biomass plans will require pellets made from 7 million oven dried tonnes (Modt) of wood each year, making it the biggest biomass-burning power station in the world. By comparison, the UK’s total annual wood production is only 5.3 Modt with little potential for increase. Wood burned by Drax increasingly comes from whole trees felled overseas for this purpose.
3. Enviva - a supplier of Drax - stands accused of threatening endangered ecosystems and wildlife in the US by clear-cutting wetland forests. ,  The industrial scale burning of wood imported from overseas is damaging global forests and the climate and should not be supported by government guarantees. Recent scientific studies have shown that the burning of whole trees can result in higher carbon emissions than burning coal. 
 Justin Scheck and Ianthe Jeanne Dugan, “Europe’s Green-Fuel Search Turns to America’s Forests,” The Wall Street Journal, May 28, 2013, A1.
 Enviva’s Wood Pellet Mill in Ahoskie, North Carolina Threatens Endangered Ecosystems and Wildlife
 “Dirtier than coal?” Friends of the Earth, RSPB and Greenpeace
4. European Environment Agency (2011) “Opinion of the EEA Scientific Committee On Greenhouse Gas Accounting in Relation to Bioenergy” “Producing energy from biomass is meant to reduce GHG emissions. But burning biomass increases the amount of carbon in the air if harvesting the biomass decreases the amount of carbon stored in plants and soils, or reduces on going carbon sequestration [...] legislation that encourages substitution of fossil fuels by bioenergy, irrespective of the biomass source, may even result in increased carbon emissions…”
5. Converting Drax partially to burning biomass will also enable it to continue to burn coal beyond 2015. Because of its high sulphur dioxide emissions Drax breaches legal limits of the European Large Combustion Plant Directive and would have to shut down by the end of 2015 without the partial conversion to biomass burning.