The UK government has referred a proposed subsidy for Drax Power Limited to the Competition and Markets Authority (CMA).
The Department for Energy Security and Net Zero (DESNZ) notified the CMA on 4 June 2025, following its intention to grant a subsidy to Drax for the development of its bioenergy with carbon capture and storage (BECCS) project at its North Yorkshire biomass power station.
The referral was made under the UK's Subsidy Control Act 2022, which enables the CMA to review subsidies that may significantly distort competition.
The BECCS project forms part of the government’s broader strategy to reach net zero emissions by 2050, with Drax claiming to be a key player in carbon removal technology.
However, concerns have been raised about whether the proposed financial support from the UK taxpayer - reportedly in the hundreds of millions - could unfairly benefit Drax over its competitors.
In its initial review, the CMA will assess whether the proposed subsidy risks distorting competition in electricity generation or related markets.
The watchdog is expected to publish a report within 30 working days, though the deadline may be extended.
The CMA has invited written submissions from interested parties by 18 June 2025.
UK government refers Drax biomass subsidy to competition watchdog
