The UK’s Financial Conduct Authority (FCA) has closed its investigation into power generator Drax after a review lasting nearly 10 months into concerns over the sourcing of wood pellets used at its biomass power station.
The regulator said it had examined thousands of pages of material during the investigation but found no evidence that warranted further action, The Guardian reported.
The investigation was launched last year following concerns that Drax may have made misleading statements to investors regarding the origin of biomass fuel used at its power station in Selby, North Yorkshire.
Drax operates the UK’s largest biomass power plant and imports millions of tonnes of wood pellets annually from North America to generate electricity.
The company maintains that biomass provides dependable renewable electricity and supports the UK’s transition away from fossil fuels. Drax has also received substantial government support tied to national carbon reduction targets. According to climate thinktank Ember, the company received £999 million in 2025 while generating around 4.5% of Great Britain’s electricity.
At the same time, environmental groups and researchers have repeatedly questioned whether the wood pellets are sourced sustainably and whether their use could increase overall carbon emissions.
The FCA said its review focused specifically on whether Drax’s annual reports and accounts between 2021 and 2023 contained misleading information or omitted material details relevant to investors.
The regulator said accurate corporate reporting is essential to maintaining market integrity and enabling informed investment decisions, adding that investigations are closed when evidence does not support regulatory action.
The review followed separate action taken in 2024 by energy regulator Ofgem, when Drax agreed to pay £25 million into a redress scheme after findings that the company lacked adequate data governance and controls when reporting details of wood historically sourced from Canada.
At the time, Ofgem said there was no evidence the issue was deliberate and described the breach as technical in nature. The regulator also stated there was no evidence that the biomass involved was unsustainably sourced or that Drax had improperly received renewable energy subsidies.
Drax Chief Executive Will Gardiner said the company recognised the importance of meeting regulatory obligations and had cooperated with the FCA throughout the process.
He said the company welcomed the decision to close the investigation without further action.
Shares in London-listed Drax rose 1.2% in early trading following the announcement. The stock had declined sharply when the FCA investigation was launched in August last year.
