UK-based power plant operator Drax plans to launch a stand-alone carbon offset business as the company looks to expand its stake in low-emission energy technologies.
Drax said in a press release on Thursday that the new business will be operationally separate within the Drax Group and will be headquartered in Houston, USA.
The US-based company will be led by Laurie Fitzmaurice, a senior energy infrastructure expert with nearly 30 years of business development experience. Drax intends to officially launch the new entity later this year.
William Gardiner, CEO of Drax, said: “The new entity will attract attention and extend the company’s carbon removal capabilities to organizations looking to reduce their carbon footprints. Meeting the ambitious targets will see the new entity become a leader in the growing carbon trading market.”
The announcement comes days after the UK government approved Drax’s plans to develop carbon capture technology at a biomass power plant in North Yorkshire, UK. Climate think tank Ember estimates the project could cost ratepayers 43 billion pounds ($54.55 billion).
Under its current plans, Drax will equip two of its four biomass units with carbon capture technology, which will see them converted to bioenergy with carbon capture and storage (BECCS) plants.
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Drax’s announcement came a day after the National Audit Office (NAO), the independent public spending watchdog, published a report on biomass spending.
According to the report, the UK Government has committed more than £20bn of public funding to business development and the use of biomass energy, which remains a key pillar of its net zero plans. Drax and the government have argued that the wood used for fuel in the biomass plant is sustainably sourced and therefore the energy produced can be considered sustainable.
The NAO report found that the government “cannot currently demonstrate that its approach to ensuring that generators meet sustainability requirements is adequate”.
The authors of the report wrote: “The lack of assessment in the NAO’s report reveals the government’s failure to demonstrate that current measures are adequate to ensure industry meets sustainability standards.”
Gareth Davies, head of the NAO, said: “If biomass is to play a key role in the transition to net zero, the government needs to make sure the industry meets high sustainability standards.
“[The] The Government must review the safeguards for these schemes, including ensuring adequate resources to safeguard the billions of pounds involved.”
This isn’t the first time Drax has faced criticism for his continued branding. UK energy regulator Ofgem has launched a series of investigations into the company over allegations of greenwashing, several of which took place last year.
The initial investigations by the regulator were prompted by the findings of a BBC investigative programme. panorama, where Drax was accused of greenwashing and causing serious environmental damage.