Drax Group (LSE:DRX) may be tempted to divert a £2bn carbon capture investment towards the US, dragged across the Atlantic by attractive subsidies offered under the Inflation Reduction Act.
US senators will visit the generator’s North Yorkshire power station next Thursday, 16 March, according to Bloomberg, where they will be shown plans for new bioenergy carbon capture and storage tech.
This visit reportedly has UK civil servants worried, as it potentially precedes a plan from Drax to invest in infrastructure in the US, where it would be granted government support under the Inflation Reduction Act, which is worth just shy of US$400bn.
Drax reckons the new tech could capture up to 95% of the CO2 emitted from its wood pellet-burning units, which have received scrutiny lately over their ‘green’ labelling.
Tory MP Pauline Latham slated the plant’s green credentials in February, pointing out it releases “huge amounts of greenhouse gases,” regardless of trees being replanted to sustain its fuel supply.
Drax will have received £11bn worth of UK publicly-funded subsidies for the plant by 2027 as part of contract for difference payments, as per data from think tank Ember, to help it produce the so called carbon-neutral power, despite the pellets still releasing emissions and actually being less energy-dense than coal.