July 27, 2022.

London. A landmark complaint alleging that UK wood-burning electricity generator Drax misleads consumers about its climate impacts will proceed to the next stage of consideration, according to a decision published today by the UK’s National Contact Point (UK NCP) for the Organisation for Economic Co-operation and Development (the OECD).

The complaint alleges that Drax’s claims to generate “carbon neutral” electricity by burning trees and other forest wood violates OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.

The complaint was filed by The Lifescape Project and The Partnership for Policy Integrity, acting collectively as the Forest Litigation Collaborative and is supported by NGOs The Royal Society for Protection of Birds (RSPB, UK) Conservation North (Canada), Biofuelwatch (UK) and Save Estonia’s Forests (Estonia).  Law firm Mishcon de Reya LLP are the legal advisors to The Lifescape Project and The Partnership for Policy Integrity.

Each year Drax’s power plant in North Yorkshire burns millions of tonnes of wood pellets that are predominantly imported from the United States, Canada, and EU countries including Latvia and Estonia. Some of the pellets Drax burns are manufactured at wood pellet facilities that Drax itself owns and operates in the US and Canada, and logging of forests for wood pellets, including old growth forests, is increasingly drawing negative attention on the industry. Burning wood pellets emits more carbon pollution than burning coal, per unit of energy, and a variety of peer-reviewed studies, as cited in the complaint, establish that net CO2 emissions from burning forest biomass exceed those from fossil fuels for decades to centuries.

Drax earned £982.5 million in ratepayer-funded renewable energy subsidies in 2021, over £2.68 million every day, for generating electricity by burning wood. The complaint argues that while Drax portrays itself as generating carbon neutral electricity, its activities actually increase greenhouse gas pollution and damage and destroy forests.  

The NGOs were encouraged by the OECD’s decision that the complaint has merit.

Elsie Blackshaw-Crosby, Managing Lawyer at The Lifescape Project, said:

Drax continues to mislead the public and investors, pocketing billions in publicly funded renewable energy subsidies while claiming to positively impact the environment. The UK NCP’s acknowledgement that our complaint warrants further investigation is a step in the right direction. We hope that this decision will lead to the withdrawal of misleading statements and a broader awareness amongst policy makers that burning wood, while claiming environmental credit, is simply wrong.

The UK NCP will now invite Drax and the complainant NGOs to mediation proceedings. The NGOs are asking Drax to revoke its misleading statements, among other demands. If mediation is unsuccessful, the UK NCP will issue its own assessment as to whether or not Drax’s claims breach the OECD Guidelines for Multinational Enterprises. 

Alexander Rhodes, Partner, Mishcon de Reya and Head of Mishcon Purpose, said:

The UK NCP’s Initial Assessment is an extremely promising development at a critical moment. It positions Drax under greater scrutiny, promoting a greater degree of transparency surrounding the actual carbon cost of emissions from forest biomass fuel and strengthening the basis of mutual confidence between energy providers and the communities in which they operate.

The OECD’s acceptance of the complaint comes just as discussion of biomass energy impacts is intensifying in both the UK and the EU.  The European Parliament will be voting on a package of reforms to the EU’s Renewable Energy Directive (RED) in September that includes changes to the “sustainability” criteria for biomass, with the Parliament’s Environment Committee recommending that use of forest biomass be largely eliminated from the RED due to its impacts on forests and climate.

Mary Booth, Director and lead scientist at the Partnership for Policy Integrity, said:

“Drax’s misleading claims, that it burns ‘sustainable’ biomass and ‘reduces’ emissions, and that biomass is ‘carbon neutral,’ are typical of wood pellet and bioenergy companies in the EU as well. Policymakers and investors alike should note that when an independent watchdog like the OECD examines such claims, they don’t stand up to scrutiny. Drax provides an object lesson in why EU policymakers should take forest biomass out of the Renewable Energy Directive.”

ENDS

Notes

The OECD

The Organisation for Economic Co-operation and Development (OECD) is an international organisation that works to “build better policies for better lives.” They establish ‘evidence-based international standards’ for responsible business conduct and find solutions to ESG challenges.

The Complainants

Lifescape is a rewilding charity which aims to create, protect and restore wild places to ensure a sustainable future for life on Earth, while The Partnership for Policy Integrity (PFPI) uses analysis, litigation, and strategic communications to promote policies that protect climate, ecosystems, and people.  The two organisations comprise the Forest Litigation Collaborative, which pursues strategic litigation to promote the protection and restoration of forest ecosystems and their associated carbon sinks, with particular emphasis on countering the use of forest biomass for renewable energy. 

They are joined by the RSPB, Canadian nature advocacy group Conservation North, UK NGO Biofuelwatch, and NGO Save Estonia’s Forests.  The RSPB uses expertise in birds and nature to provide evidence-based solutions to the nature and climate emergency; Conservation North is dedicated to combating declining wildlife caused mainly by habitat loss and degradation; Biofuelwatch focuses on the UK and EU biomass industry; and Save Estonia’s Forests fights for forest policies that take into account the ecological, cultural, economic and social value of Estonian forests.

Drax

Drax Group describes itself as “a UK-based renewable energy company engaged in renewable power generation, the production of sustainable biomass and the sale of renewable electricity to businesses”. Drax owns a power station in Selby, North Yorkshire which since 2012 has converted from burning coal to burning wood pellets in order to produce electricity.  The Drax Group also includes wood pellet production and supply businesses.

OECD Watchdog Advances Greenwashing Complaint Against Biomass Giant Drax
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