Drax’s pellet mills violated environmental law 189 times in Canada

The UK’s largest power station began importing wood from Canadian pellet plants 12 years ago. The mills, bought by Drax Group in 2021 & 2022, have breached environmental regulations 189 times.
Burns Lake pellet mill has breached environmental regulations in Canada 69 times since 2012. Photo: ©️ Stand.Earth, 2021
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Canadian wood pellet mills have illegally polluted rivers and lakes, destroyed wetlands, and breached emissions limits, while exporting biomass fuel to countries including the UK and Japan.

An investigation by Land and Climate Review, as reported by BBC Newsnight, has found years of repeated lawbreaking at facilities that export wood to burn in the UK’s largest power station, Drax.

Infringements include polluting the Endako River in British Columbia with industrial waste and repeatedly failing to test and report air pollution. Canadian environmental regulations have been broken on 189 occasions since 2012 when Drax Group began importing wood from Canada to the UK, as recorded by Canadian officials.

Drax now owns the mills after acquiring Pinnacle Renewable Energy in 2021 and buying another plant in Princeton in 2022, making the company directly responsible for more than 25 of the most recent violations. These include wetlands in Alberta being “completely destroyed” at one facility, and another failing to report pollution to the national regulator, in breach of federal law.

The mills are expected to keep copies of their compliance history on site for officials to review, but following a visit to the Princeton facility, inspectors complained that “since Drax took over operations of the site in late 2022 […] no record of inspections could be provided.”

British Columbia’s Greenhouse Gas Industrial Reporting and Control Act was breached under Drax’s ownership four times. Drax claim to be “the first energy company in the world to announce an ambition to be carbon negative by 2030”.

The company’s greenhouse gas accounting has been subject to political and scientific debate in the UK. Burning wood in power stations is officially considered ‘carbon neutral’ by the UK government, but this classification is controversial amongst scientists. Last year, Drax’s advisors recommended the company stop using the phrase.

Air pollution uproar

The vast majority of violations – 181 incidents – consisted of noncompliance with air permit rules, which are legally binding under British Columbia’s Environmental Management Act (1999). More than 100 violations related to emission testing and reporting.

These include repeatedly exceeding permit limits on particulate matter (PM) pollution. Penalty documents from the province’s environment ministry reference the “immediate and long-lasting effects” of fine PM pollution on human health. One document cites information from the U.S. Environmental Protection Agency that links PM pollution to “premature mortality”.

In several cases inspectors found that the plants were emitting more than double the legal PM limits – and in one case (in Burns Lake in 2018) more than three times the amount. These breaches have continued under Drax’s ownership, with the Burns Lake and Princeton mills exceeding PM limits multiple times in 2023, and once in 2022.

On five occasions inspectors at the plants found that environmental documentation “was not signed by a qualified professional”, and in 2019, Burns Lake pellet mill continued to run for three months after failing an air pollution test, despite being legally obliged to cease operation.

Patrick Anderson, an attorney for the Southern Environmental Law Center who has worked on similar legal claims against Drax in the US said, “failing a stack test is one of the more severe violations you can have.”

“It should be fundamental to control the amount of particulate matter – the equipment is really quite basic. The issue here is that Drax are not maintaining their pollution equipment effectively – and that is something we’ve seen when companies are trying to cut corners.”

The Smithers mill violated its air permit six times in 2019, three times in 2020, and once in 2021, while owned by Pinnacle Renewable Energy.

Jay Gilden, a retired lawyer who lives in Smithers, said the plant had “created quite an uproar amongst the local people”, after its previous owner said it would reduce smoke in the town. Northern Engineered Wood Products, Inc. (Newpro) originally promised residents that slash (a term for wood residues left behind after logging) would be processed using pollution controls at the new mill, instead of being burned outdoors.

“They were promising people a reduction in air pollution in the valley,” said Gilden. “That has never happened. There is no use of slash for wood pellets in this community. Instead, the mill uses whole logs.”

Public consultations took place in 2015, as the facility was being developed by Newpro, which had previously owned a particleboard plant on the same site. Briefing documents prepared by SLR Consulting for Newpro in 2015, seen by Land and Climate Review, claimed that the mill “will improve air quality” as it “prevents slash pile open burning.”

Despite describing the area as a “postcard”, Gilden said “we have some of the worst air in the province. With particulate matter, it’s not healthy to be hiking.”

Minutes from a Smithers town council meeting in 2015 show residents expressed concerns about the fact that not all toxins could be filtered from the air, and asked what would happen if the mill did not meet its air quality requirements. At the same meeting, Newpro claimed the mill would provide a “91% reduction in PM2.5 emissions”, and would be “monitored regularly to demonstrate compliance…in the case of poor air quality, the plant would reduce or cease operations until the air levels were restored to the acceptable levels.”

By the time operations started in 2018, Pinnacle Renewable Energy had bought a controlling interest in the mill (70%), which Drax Group acquired in 2021.

Jim Senka, who worked for the provincial government as a pollution control technician from until 2001, left Smithers to live on Vancouver Island in 2018, just before the new mill started full operations. “I was very aware of the poor air quality in the Bulkley Valley, and it scared us,” he said. “The air was so smoky.”

While acknowledging that slash burning and wildfires were also significant sources of pollution, Senka said the previous facility on the site “was a big contributor to the air quality in Smithers”, and the “new mill was a factor in his decision to leave his beautiful home”.

After its acquisition by Drax Group, local campaigners applied to British Columbia’s Environment and Climate Change Minister George Heyman to have the Smithers mill’s air permit revoked.

“We brought that case forward to the minister and they rejected our request,” said Len Vanderstar, director of the Clean Air Now – Bulkley Valley community group.

“If you hold a public consultation saying you’re going to do one thing and you do the exact opposite, then that should be grounds for permit cancellation or suspension,” he said.

Log piles visible at the Smithers pellet mill in March 2021. Photo: ©️ Stand.Earth

Along with other pellet mills in BC, Smithers’ original 2017 permit required that it “participate in a joint ambient air quality monitoring program in the local area”, as part of a wider scheme coordinated by provincial authorities. 

Despite this, Ben Weinstein, an air quality meteorologist for the BC environment ministry, said that the provincial government “hasn’t sought to recover costs associated with the ambient air quality monitoring” from pellet mills for “a number of years”. 

“The Ministry of Environment is covering the costs”, he said. “There was always the option to recover costs, but the decision makers have not requested for costs to be recovered.”

In a statement to Land and Climate Review a spokesperson from BC’s Ministry of Environment and Climate Change Strategy said:

“In 2015 the province assumed sole responsibility for monitoring costs at all air quality stations in the Bulkley Valley Lakes District (BVLD) airshed, except the weather station owned and operated by Pinnacle Pellet at their Burns Lake facility.”

Inspection reports state that even at the Burns Lake facility, as of August 2022 the “joint ambient air quality program…is not operational”.

As well as violations relating to air permits and particulate matter, the pellet mills have failed to comply with British Columbia’s Greenhouse Gas Industrial Reporting and Control Act on six occasions, including in Smithers in 2023.

As previously reported, Land and Climate Review also revealed that Drax Group’s plant in High Level, Alberta violated the federal Canadian Environmental Protection Act in 2022 by not reporting its emissions to the national registry.

The federal regulator said companies that fail to report on time could face possible fines of up to $500,000, but did not respond to later requests for updates on a possible penalty process with Drax.

Destroyed wetlands and leaky pipes

Along with extensive air permit breaches, multiple documents reveal serious contamination of water sources from the pellet mill sites.

In 2019, an inspector at the Williams Lake plant found piles of waste wood material on site that extended into a drainage channel running into the lake that the town and mill are named after.

Concerned at finding “a pond of dark liquid” that had collected in the middle of these piles, he tested the water quality and found that various chemicals including arsenic and lead were running downstream.

A similar event was recorded in Burns Lake in 2015 when an inspector discovered “effluent” (liquid waste) pouring out of an overflow pipe towards the Endako River.

Most recently, in September 2023 a Drax Group subsidiary was ordered to pay compensation to Alberta’s Wetland Replacement Program for infilling eight wetlands in Parkland County. The enforcement order said the company was unable to replace any of the wetlands they had damaged, or in some cases “completely destroyed”.

Neil Fletcher, Conservation Stewardship Manager for the BC Wildlife Federation and a member of the Wetland Stewardship Partnership, said the penalty category for the destroyed wetlands was the “highest they can set in Alberta in terms of the importance or value of the wetlands,” indicating that they were “very unique”.

“These are really critical habitats for a third of our species at-risk across North America. We’re at a tipping point where we really can’t lose many more.

“It’s unfortunate [when] industry do not follow the legislation. They should certainly know better.”

Sourcing questions

In addition to the 189 noncompliance incidents, Land and Climate Review found formal allegations from provincial government Natural Resource Officers that Pinnacle Renewable Energy violated the Forest Act by failing to mark timber in the Omineca region in 2021 and 2022, before and after its acquisition by Drax Group.

Timber marks are the principal way that the origin of wood is traced, which is vital for transparency in an industry where there have been numerous allegations of the use of old growth and environmentally critical wood.

“In terms of UK policy, these things need to be tracked. There’s a chain of custody supposedly in place,” said Richard Robertson, who works on Stand.Earth’s Forest Eye project, which monitors old-growth logging in British Columbia using satellite data. “Drax and these companies are generally one step up the supply chain and so they hide behind the sawmills.”

In 2022, the same year as one of the Forest Act notices, and then again in 2024, BBC Panorama reported that Drax sourced wood from primary forests in British Columbia.

On 29 February 2024, Drax released a statement saying that the company had made a decision to “stop sourcing wood fibre directly” from Old Growth Deferral Areas (OGDAs) in October 2023, and “work to implement this Drax decision across our supply chain is ongoing”. Almost half (47%) of British Columbia’s old growth forest is neither legally protected nor part of a deferral area.

Log piles visible at the Houston pellet mill in March 2021. Photo: ©️ Stand.Earth

Michelle Connolly, director of Canadian forestry group Conservation North, said “It’s concerning that Drax isn’t adhering to rules that are meant to provide transparency about where wood is coming from. It’s especially concerning that this is happening in north-central British Columbia, where the provincial government has allowed the logging of primary forests.”

The green energy subsidies that Drax receives in the UK through the Contracts for Difference and Renewable Energy Guarantees of Origin schemes do involve sustainable sourcing criteria, but 30% of a generator’s fuel is exempt.  Drax received £617 million from UK bill-payers in 2022, and £893m in 2021, as reported by The Guardian based on figures by energy thinktank Ember.

In January 2024 the UK’s National Audit Office stated that more needs to be done to ensure biomass power is compliant with sustainability rules, and the country’s energy regulator Ofgem is currently investigating Drax’s compliance with the subsidy scheme.

In a May 2023 statement announcing the investigation, Ofgem said:

“We are investigating whether Drax Power Limited is in breach of annual profiling reporting requirements relating to the Renewables Obligations scheme and other related matters.

The opening of this investigation does not imply that we have made any findings about possible non-compliance by Drax Power Limited.”

A Drax spokesperson said that “Drax is fully supporting Ofgem’s work and awaits the conclusion.”

International concern

Fines have been issued on 12 occasions, but Patrick Anderson at Southern Environmental Law Center said they were “insanely low”. Penalties under British Columbia’s Environmental Management Act are capped between $10,000 and $75,000, depending on the violation type. 

The largest publicly recorded fine the mills have been issued in Canada was the only one to reach the maximum limit – in that case $40,000. Six of the 12 penalties were only for $575. Drax has faced $2.5 million and $3.2m fines for similar air permit offences in the US for its pellet mills in Mississippi and Louisiana, respectively.

Drax Group is currently awaiting two subsidy decisions from the UK government – one to continue funding its biomass power generation after its contract ends in 2027, and another to add carbon capture technology to its UK power plant from 2030. A 2023 report by Heartland & Co stated that the Group’s “financial accounts show that the business would not be financially viable if it didn’t receive [UK] government subsidies”.

Robert Jenrick MP (right) visits Drax Power Station in 2019, while serving as the UK's Exchequer Secretary to the Treasury. Photo: ©️ Drax

UK members of parliament responded to Land and Climate Review’s findings, with Conservative MP Selaine Saxby saying “the latest report on Drax’s sourcing of wood pellets is very concerning.

“Since we [the UK government] first decided to subsidise energy generation from woody biomass as part of the transition from coal, it has become clear that the science on the technology has changed. Far more sustainable options have now been developed and improved, such as solar, wind and nuclear power generation, and I call on the Government to support these technologies over biomass energy generation.”

The Father of the UK House of Commons, Peter Bottomley MP, said that “Drax receives billions in public funds, despite this rule breaking overseas. These findings further expose Drax’s greenwashing. Many will be asking whether it is right for the [UK] government to be pouring billpayers’ cash into the country’s biggest polluter while it gets away with such wrongdoing.”

A Drax spokesperson said: “We are committed to environmental compliance across all of our operations. Since acquiring Pinnacle Renewable Energy in April 2021, Drax has been working to raise the standards at our Canadian pellet plants and have already invested millions of dollars in making operational improvements, working closely with the [environment ministry] in Canada, as well as with local communities and First Nations. 

“We are making progress, but recognise there is more to do.”

Appendix

The complete list of regulatory breaches compiled by Land and Climate Review is viewable below.

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