SELBY, NORTH YORKSHIRE — The Financial Conduct Authority closed an investigation into Drax regarding the sourcing of wood pellets after a 10-month review. The financial regulator found no evidence that justified any further regulatory action.

During its investigation, the regulator reviewed thousands of pages of documentation. Drax shares increased by 1.2% in early trading on Thursday. Drax shares had decreased in price when the investigation was initially announced in August.

The regulator began the investigation over concerns that Drax made statements to the market about the origins of its biomass fuel. Drax operates a biomass power plant in Selby, North Yorkshire, and imports wood pellets from across the Atlantic to generate electricity. Drax states that its biomass operations provide renewable electricity and support the U.K.'s transition away from fossil fuels. Drax shares are listed in London.

Will Gardiner, chief executive of Drax, said, "We are pleased to see the investigation closed with no action being taken." A financial regulator spokesperson said, "Our focus was on areas within our remit, specifically whether Drax's annual reports and accounts between 2021 and 2023 contained misleading statements or left out important information investors needed to know." The spokesperson added, "Accurate reporting is crucial to the integrity of our markets, and vital so investors can make informed decisions."

The regulator spokesperson also said, "Where evidence supports proportionate action, we take it. Where it does not, we close cases as swiftly as possible." In 2025, Drax received £999 million in government subsidies for generating approximately 4.5% of Great Britain's electricity.

In 2024, Drax agreed to pay £25 million to a redress scheme after the energy regulator Ofgem found the company lacked adequate data governance and controls for reporting historical Canadian wood sourcing. Ofgem determined that the data governance breach was technical rather than deliberate, and found no evidence that the biomass sourced was unsustainable or that the company wrongly claimed renewable energy subsidies.