Mischcon de Reya seeks support in action against Drax on woodchip use

The law firm Mishcon de Reya, who represented the late Lady Diana Spencer against the then Prince Charles in the 1990s, alleges Drax gave a ‘misleading’ portrayal of its sustainability practices and the environmental benefits of its use of biomass energy.

Drax has claimed that woody biomass (pellets made from residue wood including sawdust, forestry or agricultural residues and roundwood) energy is unequivocally low carbon or carbon neutral and capable of enabling Drax to produce negative emissions by 2030.

Drax also states that the wood used in its biomass pellets is derived from wholly sustainable sources. This business model has enabled Drax to receive £6.5bn of renewable energy subsidies from the UK Government.

READ MORE:

• BBC Panorama further reports on Drax use of wood from Canada forests
• Ofgem investigates Drax over burning wood pellets for power
• Drax: Watchdog questions sustainability of biomass fuel

However, the law firm and various conservation groups say burning such wood is actually harmful and emits more CO2 than coal or other fossil fuels.

Drax is also the single largest emitter of CO2 in the UK, which was admitted by Drax's CEO Will Gardiner  in oral evidence to the UK Government in November 2022.

BBC Panorama and others have also revealed Drax obtains the wood for its biomass pellets from whole logs harvested from primary old-growth forests in Canada. Panorama released a further investigation on the matter this week.

As a result, such negative media reports calling Drax's green credentials into question have triggered sizeable drops in Drax's share price from 2021 to date, the law firm says.

In 2022, the share price peaked at around £8, compared to around 475p this week.

Richard Leedham, Partner at Mishcon de Reya, said: “There are many ways in which companies who masquerade as "green" ought to be called to account. In this case, Drax's misleading statements and omissions appear to have caused actual loss to its own shareholders.

“We are committed to ensuring transparency and honesty in environmental reporting and are looking to hear from anyone who held shares from January 2021 to discuss how we would run and fund a group claim. This is not only about seeking financial redress but also about upholding integrity in sustainable investing."

This latest move follows Mishcon de Reya launching a complaint against Drax in 2021 accusing the company of ‘greenwashing’ its use of biomass.

In pursuing this complaint, the law firm acted on behalf of anti-biomass NGOs including Conservation North (Canada), Biofuelwatch (UK), and Save Estonia’s Forests (Estonia). This new intervention, believes Drax, should be considered as part of this existing campaign.

A Drax spokesperson said: “Credible leading authorities, including the UN’s IPCC and the UK’s Climate Change Committee are clear that biomass has an important role to play in delivering climate goals, including facilitating the deployment of the carbon removals technology bioenergy with carbon capture and storage (BECCS).

“Drax Power Station is the UK’s largest power station and through transforming the plant to use sustainable biomass instead of coal,  its fossil Scope 1 and 2 carbon emissions have been reduced by approximately 99% since 2012.

“The power station plays a critical role in UK energy security, generating 4% of our electricity and 8% of our renewable power, and when it is converted to BECCS operations it will be able to deliver a significant proportion of the country’s carbon removal targets.”