Energy group Drax has been cleared by the Financial Conduct Authority (FCA) after the regulator closed its investigation into the company’s historical disclosures on biomass sourcing without taking further action.

The investigation, launched in August 2025, examined statements made between January 2022 and March 2024 and assessed whether Drax’s 2021–2023 annual reports complied with UK listing and disclosure rules. The review focused on historical disclosures relating to biomass sourcing rather than the environmental sustainability of biomass itself.

"We undertook an extensive investigation following concerns raised regarding disclosures to the market about the sustainability of Drax’s Canadian biomass. We did not find evidence that justified any further action," the FCA said in a statement, adding that "thousands of pages of complex material were reviewed" as part of the investigation, and individuals from the company interviewed.

"We recognise the importance of compliance with our regulatory obligations and have worked constructively with the FCA throughout this investigation,” said Will Gardiner, CEO of Drax. “We are pleased to see the investigation closed with no action being taken."

The decision removes a significant regulatory uncertainty for Drax, which has faced heightened scrutiny over its biomass operations in recent years following earlier governance concerns raised by Ofgem. While the FCA’s decision may support investor confidence by drawing a line under disclosure concerns, the debate around the sustainability of biomass and its role in the UK’s energy transition remains unresolved.

Shares dipped slightly, around 1.3%–1.7%, on the morning of the announcement, with the outcome largely expected.

The ruling comes shortly after Drax agreed to acquire renewable infrastructure investor Bluefield Solar Income Fund in a recommended all-cash deal worth around £548m, boosting its presence across renewable energy assets.

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