A major shareholder in Drax Group is pushing the UK utility to drop some licenses to harvest trees for biomass in Canada, reported Bloomberg.
Schroder Investment Management Ltd asked the biomass producer to transfer of dispose of its existing so-called "Category Two" licenses within the next 12 months, according to a public letter from Schroders to the chairs of the UK Parliament’s Environmental Audit Committee.
The licenses allow access to plots of land in British Columbia and are issued by BC Timber Sales, a government agency that manages about 20% of the province’s allowable annual cut for public timber.
“Category Two Licences form a very small part of Drax’s sourcing portfolio,” a Drax spokesperson said to Bloomsberg , without saying if it would drop them. “We currently hold two Category Two Licences in British Columbia and will not be bidding for any more.”
Drax is also seeking approval to the UK government’s Track-1 carbon-capture program this week, while it is also being attracted by generous subsidies in the US to build biomass-fired power plants that include carbon capture, or BECCS.
Schroders, which said in the March 10 letter that it held 6.8% of Drax’s shares, added that it is supportive of the generator’s plan for BECCS.
“We consider biomass producers to play an important role in supporting energy security for the UK as it transitions towards net zero carbon emissions,” the investment firm said in its letter.
Drax shareholder “pushing” for it to drop some harvesting licenses
