£1bn but falling: Record subsidy for UK biomass burning enters final year

The Ember report details record public subsidies of £999 million paid to the Drax biomass power station in 2025, while outlining a planned reduction to approximately £460 million per year starting in 2027.

• Public subsidies for the Drax biomass power station reached a record £999 million in 2025, which equates to approximately £2.7 million per day and costs UK households roughly £13 each per year. This 2025 figure represents a 15% increase (£130 million) over 2024, driven by a 2% rise in generation and a 10% increase in the value of Renewables Obligation (RO) payments for two consecutive years.
• Subsidies for Drax are distributed via two schemes: the Renewables Obligation (RO), which provided £728 million in 2025 for three generating units, and Contracts for Difference (CfD), which provided £271 million for the remaining unit. Since 2012, total payments from these schemes have reached £8.72 billion.
• A significant reduction in subsidies is expected in 2027 as the RO scheme ends in Q1 2027. From Q2 2027, a new 'capped' CfD will cover all four units with a strike price of £157/MWh (2024 prices), a 10% increase, but subsidised generation will be capped at a capacity factor of 27%, roughly half the historic average. This will reduce annual subsidies to approximately £460 million, costing households around £6 per year.
• Drax is the UK's largest carbon emitter, a position it is expected to maintain until at least 2030 despite the 2027 subsidy cuts. The long-term justification for subsidies is weakening as Drax's plans for carbon capture technology falter, including the reported closure of a carbon capture trial and job cuts. Transitioning to bioenergy with carbon capture would require approximately £30 billion in new subsidies, exceeding the total carbon capture and storage budget.

APA

Mayo, F. (2026). £1bn but falling: Record subsidy for UK biomass burning enters final year. Ember. https://ember-energy.org/app/uploads/2026/04/1bn-but-falling-Record-subsidy-for-UK-biomass-burning-enters-final-year-1.pdf

Chicago

Mayo, Frankie. £1bn but falling: Record subsidy for UK biomass burning enters final year. Ember, 2026. https://ember-energy.org/app/uploads/2026/04/1bn-but-falling-Record-subsidy-for-UK-biomass-burning-enters-final-year-1.pdf.

Wikipedia

{{cite report |last1=Mayo |first1=Frankie |title=£1bn but falling: Record subsidy for UK biomass burning enters final year |publisher=Ember |date=16 April 2026 |url=https://ember-energy.org/app/uploads/2026/04/1bn-but-falling-Record-subsidy-for-UK-biomass-burning-enters-final-year-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mayo20261bn, author = {Mayo, Frankie}, title = {{£1bn but falling: Record subsidy for UK biomass burning enters final year}}, institution = {Ember}, year = {2026}, month = apr, url = {https://ember-energy.org/app/uploads/2026/04/1bn-but-falling-Record-subsidy-for-UK-biomass-burning-enters-final-year-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }