Drax could be in line for billions more of taxpayer subsidy as the government announces it wants public input over how and if such funding should be given.

Current subsidy arrangements end in 2027 but the government is now consulting over arrangements for after then.

People and organisations have until February 29 to comment.

The move follows the government this week approving plans for Drax to convert two of its biomass units to remove carbon dioxide as part of its £2bn BECCS project.

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A Department for Energy Security and Net Zero spokesperson said: “This consultation is seeking views on supporting large scale biomass generation to bioenergy with carbon capture and storage.
 
“No decisions have been taken and the Government is focussed on protecting people’s bills and any potential support would be subject to a rigorous value for money assessment - ensuring that any tax and bill payer money is spent wisely.
 
“The Climate Change Committee (CCC) has been clear that bioenergy with carbon capture and storage (BECCS) will be required to offset residual emissions in sectors that are difficult to decarbonise completely.”

Drax CEO Will Gardner as welcomed the announcement as a step forward in delivering BECCS.

He said: “BECCS is currently the only credible large-scale technology that can generate renewable power and deliver carbon removals.

"The consultation is necessary to develop an appropriate mechanism that will ensure biomass power stations, like Drax Power Station, continue to play an important role in the UK’s energy security while transitioning to BECCS and helping the UK to meet greenhouse gas reduction targets. We will be responding to the consultation in due course.”

Emma Pinchbeck, Chief Executive of Energy UK, agreed, adding:  “As well as providing an economic boost to the area, the UK can also benefit from taking a leading role in the development and expansion of carbon capture technology which will be crucial to decarbonisation efforts right across the world.”

However, how Drax receives subsidy to burn imported woodchips has come under further fire, including from the Institute of Economic Affairs.

The think thank said yesterday that Drax could receive up to £4bn of subsidy from the taxpayer by 2030, yet the energy used in importing woodchips from North America leads to higher carbon dioxide emissions than from power generated by traditional coal, it warned.

The government moves have also been slammed by some MPs including Leeds North West MP Alex Sobel.

He said: “The burning of virgin wood to make electricity is not renewable or sustainable. Drax needs to be undertaking a real transition to a renewable future not extending its life as a fossil fuel energy company.”

Climate campaigners this week also hit out at the government.

Doug Parr, Greenpeace UK's policy director, said: "The mass-burn of wood pellets in UK power stations is creating a juggernaut of deforestation and extensive land use.

"Households have been forced to prop up Drax's destructive activity to the tune of over £600 million a year in subsidies for too long and shouldn't be expected to pay a penny more, especially when the cost-of-living is still sky-high.

"There should be no extension of this subsidy scheme. The Government should just get on with delivering genuinely green energy solutions, like wind, solar and storage, that will actually lower bills, not increase them, and help save, not trash, the planet."

Phil MacDonald, chief operating officer at Ember, said: "We've already given Drax more than £6 billion in subsidies, and it's made bills more expensive whilst probably not helping to stop climate change."

And Katy Brown, bioenergy campaigner at Biofuelwatch, said Drax is "driving forest destruction around the world, contributing to biodiversity loss and harming local communities".