Billionaire Urges Sacking of Drax CEO as Watchdog Probes Wood Pellet Sourcing

Billionaire investor Louis Bacon has called for the chief executive of Drax Group to be sacked, saying Britain’s largest biomass power station is an "environmental and ethical calamity" and "as toxic as working for tobacco," after a City watchdog announced an investigation into the company’s use of wood pellets.

In a letter to the company, Bacon — founder of Moore Capital — criticised Drax’s governance, its receipt of large government subsidies and the board’s decision to award chief executive Will Gardiner a multimillion-pound bonus. Drax said its board had "full confidence" in Gardiner.

The call from Bacon came days after regulators said they would examine the sourcing and sustainability claims around the wood pellets burned at Drax’s North Yorkshire plant. Campaigners and some scientists have for years questioned whether electricity produced by burning imported wood pellets should be classified as renewable, arguing that combustion releases carbon and that supply chains are complex.

Drax was fined £25 million by Ofgem last year after the regulator found the company had not reported accurate sustainability data for some pellet supplies. The company has also benefited from substantial government support: according to critics cited by Bacon, Drax received about £869 million in subsidies last year.

In his letter, Bacon described the business as "hopelessly inefficient" and said that having Drax on staff CVs was damaging. He urged the company’s board to remove Gardiner, who has overseen Drax’s transition from coal to biomass in recent years and whose remuneration has attracted scrutiny.

Drax said in a statement that the board continued to support its leadership and stood by its approach to biomass generation. The company has previously defended its sourcing practices and sustainability claims, saying it complies with relevant regulatory standards and that the majority of its pellet supplies come from certified sources.

The emerging regulatory scrutiny follows increased public and political attention on the carbon accounting of biomass. Supporters of biomass generation argue that sustainably sourced wood can be part of a low-carbon electricity mix if forests are managed to regrow and re-sequester carbon, while critics contend that imports, processing and combustion create a carbon profile that undermines claims of renewability.

Energy Secretary Ed Miliband, who in recent months agreed to continue subsidy arrangements for Drax, has faced questions from opponents of biomass about the policy rationale for the support. Ministers have framed subsidies for renewable generation as part of broader energy security and decarbonisation strategies.

Investor pressure on energy companies has increased amid tighter scrutiny of sustainability reporting and governance. Moore Capital, Bacon’s firm, has been publicly active on environmental and governance issues in the past. The letter to Drax also highlighted the company’s past regulatory breaches and the reputational impact of continued controversy.

Industry analysts said any sustained regulatory action could have implications for Drax’s business model, which relies on long-term contracts and subsidies tied to the classification of biomass alongside other low-carbon technologies. Legal and accounting reviews may now follow the watchdog’s announcement as stakeholders seek clarity on which supplies meet the standards set by regulators.

Drax and its supporters point to investments in technologies and programmes intended to improve the sustainability profile of its operations, including forest management schemes and trials of carbon-capture technologies. Opponents say those measures do not address the fundamental accounting and lifecycle emissions issues at the heart of the debate.

As regulators probe the company’s pellet sourcing, the dispute highlights wider tensions in the UK’s approach to meeting climate targets while maintaining reliable electricity generation. The outcome of the investigation could influence policy and investor sentiment toward biomass and shape debates over which technologies should receive public support in the transition to net zero.