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Enabling a secure
energy transition
Drax Group plc Annual report and accounts 2025
Welcome to our
2025 Annual Report
This year’s key takeaways
Strategic report
1 Our year in numbers
2 Overview and business model
4 Market context
6 Chair’s statement
8 CEO’s review
13 CFO’s financial review
16 Key performance indicators
Sustainable Development
19 Introduction
22 Safeguarding responsible
biomasssourcing
25 Climate positive
27 Nature positive
29 People positive
31 Task Force on Climate-Related
Financial Disclosures (TCFD)
40 Non-Financial and Sustainability
Information Statement
41 Principal risks and uncertainties
49 Viability Statement
Governance report
52 Governance at Drax
54 Corporate Governance Report
56 Board of Directors
60 Section 172 statement
61 Stakeholder engagement
72 Nomination Committee report
77 Audit Committee report
87 Remuneration Committee report
118 Directors’ report
120 Directors’ responsibilities statement
Financial statements
121 Financial statements contents
122 Independent Auditor’s report to the
members of Drax Group plc
Shareholder information
250 Shareholder information
253 Glossary
Drax is a renewable energy company engaged
in generating renewable power, producing
sustainable biomass, and selling renewable
electricityto businesses. We are the UK’s
largestsinglesource of renewable electricity.
Learn more about
what we do at
www.drax.com
What we do
Keeping the lights on: how we
support the UK’s energy security.
Seepage 8
Responsible
biomass sourcing
Our responsibility, policies,
and information around
the carbon cycle.
Seepage 22
Looking ahead
Putting in place the structures
toallow the Group to succeed
andgrow.
Seepage 11
Our year in numbers
Non-financial highlightsFinancial highlights
(1) Alternative performance measures aredescribed in note 2.7 to the Consolidated
financial statements on page 163.
(2) 2024 comparator number re-calculated (see page 21).
Adjusted EBITDA
(1)
Dividend per share
Group carbon emissions Scope
1 and 2 (location-based)
Total recordable
incident rate
£947m
(2024: £1,064m)
29.0p
(2024: 26.0 pence)
557 ktCO
2
e
(2024: 546 ktCO
2
e)
0.33
(2024: 0.24)
Total operating profit Cash generated
from operations
Wood pellets produced Employee
engagement score
£241m
(2024: £850m)
£1,000m
(2024: £1,135m)
4.2Mt
(2024: 4.0Mt)
7. 2
(2024: 7.4)
Total revenue Net debt
(1)
Group emissions per GWh of
electricity generation
(2)
Group carbon
emissions Scope 3
(2)
£5,391m
(2024: £6 ,163m)
£784m
(2024: £992m)
35 tCO
2
e/GWh
(2024: 35 tCO
2
e/GWh)
1,504 ktCO
2
e
(2024: 1,808 ktCO
2
e)
Adjusted basic earnings
pershare
(1)
Total basic earnings per share
Total UK renewable
electricitygenerated (%)
137.7p
(2024: 128.4 pence)
20.7p
(2024: 137.5 pence)
10.6%
(2024: 10%)
Find out more
Read our ESG report
www.drax.com/esg-
performance-report-2025
Read the CFO’s
Financial Review
Seepage 13
Find out how we
source our biomass
Seepage 22
1 Drax Group plc Annual report and accounts 2025Strategic report
Overview and
business model
Our enablers
People Flexible, renewable,
generation assets
Integrated supply
chain
Financial strength
Workforce Shareholders
and investors
Communities Government,
political bodies
and regulators
Customers
and suppliers
Seepage 61 Seepage 62 Seepage 65 Seepage 63 Seepage 62
Seepage 29
Seepage 8 Seepage 8 Seepage 13
How we deliver
Pellet
Production
14 plants: own-use and
third-party supplyof
responsibly sourcedpellets
Drax Power
Stationsite
The UK’s biggest power
station and largest source
of renewable power
Options
for growth
Disciplined capital allocation
policy supports investment
forgrowth and returns to
shareholders
Flexible Generation &
Energy Solutions
(FlexGen)
Pumped storage, hydropower,
Open Cycle Gas Turbines
(OCGTs), battery energy
storagesystems (BESS),
energysolutions
Targeting post-2027 Adjusted EBITDA of £600-700m p.a.
Our stakeholders
Our purpose is to enable
a zero carbon, lower-cost
energy future
Our diversified,
dispatchable, and
renewable portfolio
generates consistent,
flexible and secure
energyfor the UK
The energy we generate
equates to c.5% of the
UK’s total power demands
Number of countries
in which we operate
4
Employees worldwide
2,974
2 Drax Group plc Annual report and accounts 2025
Overview and business model continued
Pellet supply
to Asia
Pellet supply
to Europe
Canada
US
Drax Power
Station site
The 4GW site comprises four fully flexible
and independent biomass units providing
2.6GW of capacity for secure 24/7
renewable power – capable of generating
enough renewable electricity to power the
equivalent of over eight million homes – and
a wide range of system support services.
In addition, the site has a further 1.3GW
ofgrid access.
Options for growth
Options to invest in growth – energy
security, data centres, and flexible,
renewable energy, including GW scale
pipeline of BESS opportunities.
Drax Power Station site – development
ofoptions to utilise 4GW of capacity
andgrid access. Planning application
indevelopment for potential option for
c.100MW data centre. Ambition to grow
to>1GW data centre post 2031. Develop
system support capabilities and FlexGen.
Pellet Production
A vertically integrated producer, user,
buyer, and seller of sustainable biomass.
Producing wood pellets for use for
generation at Drax Power Station and
forcontracted sales to third parties in
Asiaand Europe.
FlexGen
Our portfolio of flexible generation
andenergy solutions includes
c.2.1GWoflong- and short-duration
storage andflexible generation:
0.4 GW capacity
Cruachan pumped storage
hydropowerstation
0.7 GW c apacit y
BESS
(when fully commissioned)
0 .1 GW capacity
Lanark and Galloway
hydropower schemes
0.9 GW capacity
OCGTs (when fully
commissioned)
A portfolio aligned to energy security
and the transition to net zero.
UK
c.5Mt p.a. of capacity
Across
14 plants inthe USA and Canada
3 Drax Group plc Annual report and accounts 2025Strategic report
Market context
The global energy landscape in 2025 continued to evolve
amid a complex landscape of geopolitical, economic,
andtrade tensions, the prioritisation of energy security,
andaccelerating demand for power.
Ongoing conflicts in Ukraine and the Middle East,
combined with the reshaping of international trade
and supply chains, have influenced global energy markets
andheightened concerns over energy resilience.
As a result, security of supply has re-emerged as the
defining energy priority.
This shift has influenced how countries design
and support their energy transition. In some
advanced economies, the emphasis has moved
from net zero towards ensuring reliable,
affordable, and secure energy. Emerging
industries – from AI and data centres to
electrified manufacturing – are driving
increased demand for reliable energy.
Thesystem will need to manage supply
tomeetthese growing demands, while also
balancing affordability and decarbonisation.
Drax, through our flexible generation strategy,
sustainable biomass production, and in the
longer term potential for carbon removals,
isaligned to this change. By delivering
dispatchable, low-carbon power where it
matters most, and leveraging our sustainable
biomass supply chain, we are well placed to
support global energy systems and continue
todevelop our business with benefits to our
investors and stakeholders.
4 Drax Group plc Annual report and accounts 2025
Strengthen focus on
UK security ofsupply
Drax continues to contribute to security of supply and grid
resilience in the UK. In 2025, across our biomass, pumped
storage, and hydro assets, Drax generated around 11% of the
UK’s renewable power.
In 2025, Drax agreed a new low carbon dispatchable contract
for difference (CfD) with the UK Government for the operation
of Drax Power Station from 2027 to 2031.
The low carbon dispatchable CfD will support UK energy
security into the 2030s and deliver a net saving for consumers
compared to alternative sources of dispatchable low carbon or
renewable generation, whilst supporting the rollout of
intermittent renewable generation (wind and solar).
An independent analysis
(1)
estimated consumer savings of up to
£3.1billion over the four-year term, while ensuring Drax Power
Station helps to keep the lights on for millions of homes and
businesses, no matter the weather. The new agreement
includes enhanced biomass sustainability requirements, which
the Group is confident it can meet due to its commitment to
delivering positive outcomes for the climate, nature, and people.
Alongside these developments, energy storage solutions,
primarily short duration battery energy storage systems
(BESS) is increasingly recognised as a potentially effective
means of helping to manage power systems which are
becoming increasingly dependent on intermittent renewables.
Evolving policy frameworks
Despite a more challenging global political, regulatory and
policy landscape, support remains favourable to dispatchable
generation and renewables, which can support energy
security. While carbon removals remains an important feature
of long-term policy, in the short-term support now less certain.
In the UK, the Clean Power 2030 Action Plan and the National
Energy System Operator’s (NESO’s) long-term system
planning explicitly recognise biomass will play an important
role by providing flexible or firm generation. The UK
Government also widely acknowledges the role that carbon
dioxide removals (CDRs) will play in achieving the UK’s Carbon
Budgets and legally binding net-zero target.
The UK Government’s Common Biomass Sustainability
Framework proposes ambitious but achievable new
sustainability criteria for future biomass schemes. However,
clarity about the final sustainability criteria as well as action
from industry, Government and regulators to implement them
and communicate more fully the value of sustainable biomass
to the system is also required.
In the US, the Trump Administration is placing a fresh emphasis
on domestic energy infrastructure whilst simultaneously
moving away from international climate change organisations.
President Trump’s landmark legislation aims to strengthen
energy resilience to support the electrification of the US
economy and growth in data centres with a focus on baseload
power – primarily via fossil fuels. The Administration and
Congress remain strongly supportive of carbon capture, one of
the few incentives preserved and enhanced during the recent
reconciliation process that overhauled the Inflation Reduction
Act. Similarly, the Administration supports sound forest
management practices and recognises the potential for
biomass domestically and internationally.
In the EU, policymakers are considering an extension to the EU
Emissions Trading Scheme (ETS) to include CDRs and linking
the EU ETS with the UK ETS. This has the potential to align
carbon pricing between the UK and the EU, as well as create a
sizeable compliance market for high-integrity carbon removals.
Delivering the power
behind a reliable transition
Globally, the market focus continues to shift, increasingly
centred on reliable and dispatchable generation. New demand,
which we believe will continue to grow, requires power that
isnot just clean, but dispatchable. This is in line with NESO’s
Future Energy Scenarios, which show a potential doubling
oftotal demand for electricity in the UK over the coming
decades, aswell as an increase in curtailment of wind and
reduction indispatchable thermal generation.
Our FlexGen and Biomass Generation strategies are well suited
to meet these evolving needs, and the Group is actively taking
steps to add BESS to enable it to provide fast response and
awider range of system support services from its FlexGen
portfolio. Similarly, the new low-carbon dispatchable CfD
provides options to ensure Drax Power Station continues to
support the regional economy and the UK’s energy system.
As the global energy architecture evolves, Drax remains
committed to creating value and growth in the short, medium,
and long term, aligned to global energy needs. With our
generation portfolio, resilient biomass supply chain, and
carbon removal ambitions, we are well placed to enable
azerocarbon, lower cost energy future.
(1) https://www.drax.com/wp-content/uploads/2025/02/Baringa_Report_
February_2025.pdf
Overview and business model continued
5
Drax Group plc Annual report and accounts 2025
Strategic report
We aim to deliver c.£3 billion
offree cash flow from the
business which can support
investment in energy security,
data centres, and flexible,
renewable energy
Andrea Bertone
Chair
People and values
Throughout the year I continued to engage with stakeholders,
including shareholders and colleagues, regulators and suppliers.
I would like to thank all colleagues for their hard work, dedication,
and expertise in helping us deliver a strong result in 2025, and
their continued commitment to our purpose and the delivery
ofour strategy. Will Gardiner and I continue to enjoy meeting
colleagues and attending the employee MyVoice Forums,
whichalways provide open, rich conversations on a wide range
of topics and which help to inform Board discussions.
Following the signing of the low carbon dispatchable CfD, we
areworking to put in place the right organisation and operating
models, combined with a high-performance culture which can
support growth and success in the future. As a result, during
2025, the Group commenced a reorganisation process on
changes to roles in certain areas of the business. This process
will continue in 2026.
Governance, compliance and sustainability
Good governance, compliance and sustainability are
prerequisites for a well-run company and long-term success.
We recognise the importance of these matters and over the
lastfive years we have continued to invest in governance and
compliance functions as the footprint of the business has grown.
Progress is a journey and there are always opportunities to
evolve and improve.
In August 2025, the UK’s Financial Conduct Authority (FCA)
commenced an investigation into the Company, covering the
period January 2022 to March 2024, relating to certain historical
statements regarding Drax’s biomass sourcing and the
compliance of Drax’s 2021, 2022 and 2023 Annual Reports with
the Listing Rules and Disclosure Guidance and Transparency
Rules. This process is ongoing, and we will continue to co-
operate with the FCA as part of their investigation.
In December 2025, the Group was awarded an A rating by CDP
for its carbon and forestry reporting. This is a year-on-year
improvement and reflects the Group’s continued commitment
tosustainability in its widest sense. This places Drax in the top
4% of those companies that the CDP reports on globally.
Introduction
2025 was a strong year for the Group. Operationally, we
produced large volumes of flexible and renewable energy to
theUK, supporting energy security, and backed up by our North
American supply chain. Financially, our earnings and cash flows
were strong, supporting a strong balance sheet, investment in
the business and returns to shareholders.
Strategy
Between 2025 and 2031, we aim to deliver c.£3 billion of free
cash flow from the business which can support investment in
energy security, data centres, and flexible, renewable energy
inthe UK, underpinning long-term value creation and attractive
returns for shareholders.
Reflecting growing UK power demand, combined with an
increased reliance on intermittent and inflexible generation,
Draxexpects to grow its FlexGen portfolio which can support
energy security and the continued deployment of renewables.
We see battery energy storage systems (BESS) as an important
new technology for our FlexGen portfolio and are developing
agigawatt (GW)-scale pipeline of opportunities. Since October
2025, Drax has signed an agreement to acquire three BESS
projects which, when fully commissioned, will provide capacity
totalling 260MW, and an asset optimisation platform. We also
agreed long-term tolling agreements for a further 450MW.
TheGroup is assessing options for other renewables, which
cancomplement its FlexGen model.
The Group is also focused on options to maximise value from
theDrax Power Station site. This could utilise multiple generation
technologies – including its existing biomass generation as well
as flexible, renewable energy, to continue to support energy
security. This could also, potentially, meet the power demands
ofa large-scale data centre.
In November 2025, we signed a low carbon dispatchable CfD
withthe UK Government to cover all four biomass units at
DraxPower Station over the period April 2027 to March 2031.
This was a significant milestone for the Group and will help
support UK energy security into the 2030s and deliver a net
saving for consumers compared to alternative sources of
dispatchable generation.
Chair’s statement
6
Drax Group plc Annual report and accounts 2025
I would like to thank all colleagues
fortheir hard work, dedication, and
expertise in helping us deliver a strong
result in 2025, andtheir continued
commitment toour purpose and the
delivery ofour strategy.”
Board changes
In December 2024, Andy Skelton, Chief Financial Officer (CFO),
announced his intention to retire from the Board and his role
asCFO. Andy continued to work until August 2025 and stepped
down from the Board on 1 September 2025 and retired from
theGroup in December 2025. I would like to thank Andy for
hisoutstanding service to the Group over the past six years.
Throughout 2025, the Nomination Committee worked on the
recruitment of Andy’s replacement, and on 1 September 2025
we were delighted to welcome Frank Lemmink as the new CFO.
Frank has held senior finance and risk management roles over
a20-year international career with Shell plc. Frank’s experience
includes upstream energy with responsibility for business
performance, strategies for long-term, sustainable growth and
performance, and he has also worked inrenewables and energy
solutions, M&A, and internal audit. Frank’s experience is
invaluable as we develop our plans for the Group.
In February 2026, we were pleased to appoint Mark Clare as
aNon-Executive Director.
Finally, Nicola Hodson stepped down from the Board in May
2025. I would like to thank Nicola for her contribution to Drax.
Summary
In 2025, we generated a record level of renewable generation
across our portfolio of flexible and renewable generation assets
as we continue to play an important role in the UK energy
system, supporting energy security. This has resulted in a strong
financial performance and returns to shareholders.
At the same time, we have made good progress with our
strategy, which is well aligned with our purpose and the
challenge of energy security, affordability, and decarbonisation
(the energy trilemma). We are excited for the opportunities that
2026 and beyond will bring, as we seek to deliver long-term value
creation for stakeholders and realise our purpose of enabling a
zero carbon, lower cost energy future.
Andrea Bertone
Chair
25 February 2026
Chair’s statement continued
7
Drax Group plc Annual report and accounts 2025
Strategic report
CEO’s review
Introduction
Energy security, affordability, and decarbonisation remained
important themes in 2025 and at Drax – which sits at the heart
ofthe UK energy system – we are continuing to play our part
inaddressing these issues.
In 2025, we delivered a strong operational and financial
performance, providing the reliable renewable electricity,
flexibility, and system support services that the grid needs.
During 2025, Drax was the sixth largest source of power, the
third largest source of dispatchable power, and the second
largest source of renewable energy in the UK. Our dispatchable
24/7 generation portfolio, backed up by our resilient North
American supply chain, enables us to supply large-scale reliable
renewable power to the UK. And through our flexibility, we are
an enabler of more renewables on the system, supporting lower
overall system costs and decarbonisation.
In 2025, we also celebrated 60 years of operations at Cruachan
Power Station and 10 years of operations for our Pellet
Production business in the US South. These milestones show
ourcontinuing long-term support for energy security and the
advancement of renewable energy. I would like to thank all our
dedicated colleagues in these businesses and across the Group
for their continued professionalism and commitment.
The ‘Future Energy Scenarios’ report, published by NESO, shows
a potential doubling ofelectricity demand over the next 25 years
as electrification supports decarbonisation and economic
growth. Our four operational power stations are helping to meet
this challenge and we are developing a further three Open Cycle
Gas Turbine (OCGT) and three BESS projects, with additional
tolling agreements.
We also see more opportunities to meet this rise in demand and,
to that end, we are continuing to develop options for investment
in flexible, renewable energy and for the utilisation of the 4GW
Drax Power Station site. The latter could utilise multiple
generation technologies – including its existing biomass
generation, as well as other flexible, renewable energy – to
continue to support energy security. Using multiple technologies
also has the potential to meet the power demands of a large-
scale data centre and, in the long term, has the potential for
carbon removals from bioenergy with carbon capture and
storage (BECCS), subject to the right Government policies and
commercial arrangements.
Will Gardiner
CEO
During 2025, Drax was
thesixth largest source
ofpower, the thirdlargest
source of dispatchable
power, and the second
largest source of renewable
energyin the UK
The Group is also assessing options for other renewables, which
can complement its FlexGen model.
These opportunities are built on a firm base. Our balance sheet is
strong, and the business is generating significant free cash flow.
We stand ready to invest in our strategy and opportunities to
create value from our asset base, and will be disciplined on
capital allocation, as we seek to maximise shareholder value.
Safety
Safety must always be a primary focus, and, in 2025, we have
notperformed at the level we expect. The Total Recordable
Incident Rate (TRIR) was 0.33 (2024: 0.24). The increase is partly
attributable to the disposal of the Opus Energy business, where
asignificant number of hours were worked with a very low
incident rate. We also continue to track leading indicators of
nearmiss and hazard identification rates, where performance
has been much stronger, in addition to the lagging TRIR indicator,
and these both represent key targets for the Group.
Summary of 2025
Adjusted EBITDA of £947 million, represents an 11% decrease
on2024 (£1,064 million). This reflects a strong operational and
financial performance, with a continued high level of renewable
power generation and system support services, partially
offsetting lower average achieved power prices.
Our balance
sheetisstrong,
andthe business
isgenerating
significant free
cashflow.”
8 Drax Group plc Annual report and accounts 2025
Our balance sheet is strong, with total cash and committed
facilities of £942 million and Net debt of £784 million. Net debt
toAdjusted EBITDA is less than 1 times – significantly below the
Group’s target of around 2 times.
In line with our policy to pay a sustainable and growing dividend,
the Group plans to pay a total dividend for 2025 of 29.0 pence
per share. This is an increase of over 11% on 2024 (26.0 pence
per share). Since the policy’s inception in 2017, the annual
average rate of dividend growth has been c.11%.
Throughout the year, the Group has remained focused on
shareholder value. In October 2025, the Group completed a
£300 million share buyback programme, which had commenced
in August 2024. The Group subsequently began a £450 million
share buyback programme (first announced in July 2025), with
an initial £75 million tranche. In aggregate, during 2025, the
share buyback programmes have purchased c.34 million shares
for c.£221 million. When combined with dividend payments this
represents total returns to shareholders of c.£317 million
during2025.
Low carbon dispatchable CfD
In November 2025, Drax signed a low carbon dispatchable CfD
with the UK Government to provide c.6TWh of biomass
generation pa between April 2027 and March 2031 – equivalent
to c.30% of baseload output – with a strike price of £109.90/
MWh (2012 real). In addition, we have the option to produce
merchant generation above the cap, and provide system support
and ancillary services.
The agreement includes a mechanism for Drax to request up
to500MW to power a data centre during this period. This
mechanism is subject to agreement with the UK Government,
taking into account factors including value for money for
consumers, energy security, and sustainability.
We expect the contract to provide increased visibility on EBITDA
from the asset between 2027 and 2031. We also believe that
Drax Power Station will continue to play a long-term role in the
UK energy system through the 2030s.
Flexible Generation & Energy Solutions (FlexGen)
Pumped Storage and Hydro
Adjusted EBITDA was £111 million (2024: £138 million). During
2025, we progressed a major programme of planned outage
works at Cruachan Power Station. This included an upgrade to the
main inlet valves on all four units, in addition to a programme of
works to upgrade transformers that completed in January 2026.
Taking into account this planned programme of outage we
believe that this represents a good underlying performance,
andreflects continued demand for dispatchable and renewable
power generation and system support services.
Work continues on the £80 million investment to refurbish and
upgrade units 3 and 4 through to 2027. This is underpinned by
a15-year Capacity Market agreement worth over £220 million
inrevenue. The work is expected to add 40MW of additional
capacity by 2027 and improve unit operations.
OCGTs
In the first half of 2026, we expect to take control of Hirwaun
Power, the first of three new OCGTs. The second and third sites
are expected to commence commissioning in 2026, which is later
than originally planned, primarily due to delays in grid connection
by the relevant authorities.
The OCGTs will provide combined capacity of c.900MW and be
remunerated under 15-year Capacity Market agreements, worth
over £260 million in revenue. This is in addition to revenues from
peak power generation and system support services.
We have previously considered divestment of these assets, once
commissioned, but the changing generation mix in the UK means
that flexible generation assets will become more important to
theenergy transition. This increased value informs our decision
to retain these grid-balancing assets in the portfolio once
commissioned.
Energy Solutions
Adjusted EBITDA in Energy Solutions was £49 million
(2024:£51 million) comprised of £54 million from our Industrial
and Commercial (I&C) and renewables services business
(2024:£81 million) partially offset by a loss of £5 million from
ourSmall- and Medium-sized Enterprise (SME) business (Opus)
(2024: a loss of £30 million).
Alongside supplying renewable energy, our I&C business is
increasingly active in the provision of value-adding services.
These services include asset optimisation and aroute-to-market
for around 2,000 embedded third-party renewable assets with
capacity of over 800MW.
In May 2025, the Group completed the sale of the remaining
non-core Opus Energy SME customer meter points. We expect
the sale to be supportive of the Group’s target for post-2027
Adjusted EBITDA, with a leaner and more focused I&C business
better able to support customers’ energy needs and
decarbonisation objectives.
CEO’s review continued
Through a disciplined approach
tocapital allocation and
development costs, we expect
tocreate opportunities for
investment in growth and value
creation, underpinned by strong
cash generation and attractive
returns forshareholders.”
Between October
2024 and September
2025 Drax Power
Station generated
over 5% ofthe UK’s
electricity and c.10%
of its renewable
power. “
9
Drax Group plc Annual report and accounts 2025
Strategic report
Pellet Production
Adjusted EBITDA of £129 million was a 10% decrease on 2024
(£143 million), although production increased incrementally and
included the full-year impact of the expansion of the Aliceville
pellet plant (commissioned in H1 2024).
The lower level of EBITDA reflects the cost-plus transfer pricing
methodology used for biomass supplied from operations in the
US South to Drax Power Station. Under this established
arrangement, if the Pellet Production business reduces its cost
base, its sales revenues to the UK business also reduce, resulting
in lower Adjusted EBITDA. The offset to this is a lower cost of
biomass for Drax Power Station, which results in higher EBITDA
at the Group level. This situation illustrates the benefit of the
integrated value chain between operations in the US South and
Drax Power Station, and our ongoing focus on opportunities to
reduce cost.
The Group’s Canadian business, which primarily sells pellets into
Asia under legacy contracts, is more challenged, and we continue
to assess options to improve its financial performance. This
contributed to the decision, announced in December 2025,
toclose the pellet plant in Williams Lake, British Columbia. In
addition, we closed two small satellite plants in the US, with
volumes consolidated into larger plants in the region.
Separately, reflecting lower biomass requirements under the low
carbon dispatchable CfD, the Group does not currently expect
toinvest in additional capacity – including the paused Longview
project inWashington State (US) – in the short to medium term.
Drax Power Station
Adjusted EBITDA of £725 million was a decrease of 11% on 2024
(£814 million). This reflects a combination of lower forward
contracted prices compared to 2024, partially offset by a
continued high level of generation and value from renewable
certificates. In addition, there were no major planned outages
in2025.
Between October 2024 and September 2025 (the most recent
period for which data is available), Drax Power Station generated
over 5% ofthe UK’s electricity and around 10% of its renewable
power. During this period, it produced, on average, 19% of the
UK’s renewable power at times of peak demand and on certain
days over 50%.
During 2025, low wind speeds led to lower proportions of wind
generation and higher demand for electricity from Drax Power
Station, illustrating its ongoing importance to security ofsupply
in the UK.
The Group remains focused on opportunities to maximise value
from its existing asset base. In March 2025, we entered into a
20-year joint venture agreement with Power Minerals Limited
that will allow for the development of a facility adjacent to Drax
Power Station. This facility which will process pulverised fuel ash
into a material which can be sold to the construction industry and
used in the production of cement with a lower carbon footprint.
The new facility is expected to begin operations by the end of
2026, and we believe the project could generate incremental
Adjusted EBITDA of c.£5 million pa for Drax post-2027 through
to2046. There is no capital investment required by Drax.
Development expenditure
Development expenditure of £74 million in 2025 was a reduction
of 5% on 2024 (£78 million). This reflects a significant reduction
in the Elimini business, following one-off costs during its
establishment in 2024 and minimal spend on BECCS, partially
offset by additional OCGT commissioning costs.
The current regulatory environment in the UK and US makes the
risk-return profile on carbon removal projects less attractive in
the short term. Through its Elimini business, the Group continues
to see carbon removals via biomass and other technologies as
acost-effective way to deliver both energy security and high
integrity carbon removals at scale. Accordingly, the Group will
maintain its options for long-term development in the carbon
removals market but expects to commit limited resources for
theforeseeable future. Elimini will also support the development
of new biomass markets.
Reflecting these considerations, the Group expects future
development costs to increasingly focus on more short- and
medium-term opportunities in FlexGen and Drax Power Station.
Adjusted EBITDA and free cash flow targets from the
existing business
The Group continues to target post-2027 Adjusted EBITDA
of£600-700 million pa before development expenditure.
Reflecting growing UK power demand, combined with an
increased system reliance on intermittent and inflexible
generation, Drax expects to grow its FlexGen portfolio to
comprise a greater proportion of total Adjusted EBITDA over time.
Drax is targeting free cash flow of c.£3 billion (2025-2031), based
on strong cash flows from the current business (2025-2026),
together with targeted Adjusted EBITDA (2027-2031), plus working
capital, less maintenance capital expenditure, interest andtax.
The Group’s capital allocation policy is unchanged. Drax expects
to initially allocate more than £1 billion of free cash flow to
shareholder returns (2025-2031). This is inclusive of the ongoing
£450 million three-year share buyback programme, and the
continuation of its long-standing policy to pay a sustainable
andgrowing dividend.
Drax expects to allocate up to c.£2 billion to incremental
investment, primarily in the flexible and renewable energy
theUKneeds, as well as opportunities to maximise value
fromthe Drax Power Station site.
Returns to shareholders and investment for growth follow a
capital ranking process which aims to maximise risk adjusted
returns to shareholders.
Our balance sheet is strong, with
total cash and committed facilities
of £942 million and Net debt of
£784 million. Net debt to Adjusted
EBITDA is less than 1 times –
significantly below the Group’s
target of around 2 times.”
CEO’s review continued
10 Drax Group plc Annual report and accounts 2025
Putting in place the structures to allow the Group to
succeed and grow
Delivery of the Group’s targets and strategy is underpinned by
disciplined cost management and an operating model adapted
toreflect the structure of the new low carbon dispatchable CfD,
combined with a high-performance culture.
Options to invest in growth – FlexGen – flexible and
renewable energy
The continued decarbonisation of the UK power system and
newsources of demand, are leading to a greater reliance on
intermittent renewables. The system is becoming cleaner but
more volatile, driving a growing need for dispatchable power
andsystem support services. This creates long-term earnings
opportunities for, and value from, the Group’s FlexGen assets.
While the trend is clear, it is hard to forecast from year-to-year,
being dependent on weather and associated renewable activity
as much as underlying commodity prices.
This position informs the Group’s view on the value of its FlexGen
portfolio and opportunities for growth, which can support energy
security and the continued deployment of renewables. Since
acquiring the pumped storage and hydro assets in 2018,
utilisation of these assets has increased significantly, delivering
afive-year payback on investment.
In addition to its existing operational assets and developments,
the Group sees BESS as an important new technology for its
FlexGen portfolio. Adding fast response capabilities to existing
long-duration pumped storage and OCGT assets, BESS could
allow the portfolio to provide a wider range of system support
services to the grid.
Drax is developing a GW-scale pipeline of BESS opportunities.
These comprise both physical assets and the capabilities to
optimise third-party assets by providing route-to-market, floor,
and tolling structures. These can complement its existing
route-to-market offering for renewable assets in Energy Solutions.
In October 2025, Drax signed an agreement with Apatura to
acquire three BESS projects for £157.2 million which, when
fullycommissioned, will provide capacity totalling 260MW.
InJanuary 2026, Drax announced the acquisition of Flexitricity
for £36 million, providing an optimisation platform for the
development of the Group’s FlexGen portfolio, including BESS.
Also in January 2026, Drax agreed a 10-year tolling agreement
with Fidra, which gives the Group operational control and
dispatch rights over 250MW of new BESS capacity from 2028,
and a 15-year tolling agreement with Zenobē, which gives the
Group operational control and dispatch rights over 200MW of
new BESS capacity from 2028.
The Group is also assessing options for other renewables projects
to complement its FlexGen model.
Options to invest in growth – Drax Power Station site
The Drax Power Station site comprises over 1,000 acres
and4GW of capacity and grid access, with 2.6GW of active
dispatchable generation, cooling systems, and proximity to
theUK fibre network.
The Group is actively evaluating options to utilise inactive legacy
units to provide system support services. For example, by using
power from the system to spin these inactive turbines we can
synchronise them to the system and use their physical mass
toprovide inertia, thereby helping to stabilise the system.
Drax is also considering a range of options for the site which
could utilise its existing land, grid access, active generation,
cooling solutions, site security, location, and skilled workforce
tomeet the needs of data centre developers.
Drax is preparing a planning application to support the potential
option for a first phase data centre of c.100MW on land identified
at Drax Power Station. This could use the existing infrastructure
and transformers previously used to support coal generation to
import power directly from the grid (front-of-the-meter). This could
support the operation of a data centre at Drax Power Station as
soon as 2027, subject to the necessary consents and agreements.
In the long term, Drax is developing options for over 1GW of data
centre capacity. This could utilise existing generation capabilities
at Drax Power Station to provide a distributed (behind-the-
meter) energy solution with around-the-clock renewable power
directly to a data centre under a long-term Power Purchase
Agreement, subject to necessary consents and agreements.
Any decision to develop data centres at Drax Power Station will
require a full assessment of the capital cost and investment case,
as well as establishing the commercial and development structures.
Pellet Production
As a part of the Group’s post-2027 targets, the low carbon
dispatchable CfD at Drax Power Station is expected to utilise
c.2Mt of own-use pellets from the US South (in addition to
third-party volumes). This, together with existing sales to third
parties, primarily in Asia, provides a good underpin to the current
level of value generated for the Group from Pellet Production.
Long-term development of biomass and carbon markets
In the long term, Drax remains positive on the role of biomass in
industrial decarbonisation and carbon removals via its Elimini
business. Drax continues to assess options for own-use and
third-party sales, from existing and new markets, including
Sustainable Aviation Fuel (SAF), which could represent a new
market opportunity through the 2030s.
Sustainability
In addition to delivering a strong operational and financial
performance and value for shareholders, the Group has remained
focused on the development of its sustainability programme.
In2025, we launched a new Sustainability Framework, Biomass
Sourcing Policy, and a Climate Transition Plan.
£317 million
Total returns to shareholders, including dividends, in 2025
CEO’s review continued
As a purpose-led
organisation, our
growth should lead
to positive outcomes
for climate, nature,
and people.”
11
Drax Group plc Annual report and accounts 2025
Strategic report
CEO’s review continued
As a purpose-led organisation, our growth should lead to positive
outcomes for climate, nature, and people. Our operations can
help sustain more healthy, safe, and economically viable working
forests that continue to provide jobs and opportunities in
communities where we operate.
Working in partnership with industry, communities, scientists,
and civil society organisations will be vital to achieving our
ambitions. We aim to work openly and constructively with
thesegroups to help deliver improvements.
We are fully aligned with the Task Force on Climate-related
Financial Disclosures (TCFD). We are also an early-adopter of
theTaskforce on Nature-related Financial Disclosures (TNFD).
Inaddition, we are members of the Taskforce on Inequality and
Social-related Financial Disclosures (TISFD) Alliance. These
independent taskforces align directly with the three pillars of
ournew Sustainability Framework; Climate, Nature, and People.
We are also a signatory to the UN Global Compact (UNGC) and
we are committed to promoting the UNGC principles concerning
respect for human rights, labour rights, the environment, and
anti-corruption.
Drax is one of the world’s largest users of sustainable biomass
forenergy generation. We are committed to ensuring the woody
biomass we source comes from forests managed in accordance
with standards designed to support their health and growth over
the long term. Forests in the areas where Drax sources material
are subject to national and regional regulation and are typically
supported, and independently monitored for compliance, by
forest certification schemes. These include the Forestry
Stewardship Council® (FSC®) (FSC C123692), the Sustainable
Forestry Initiative (SFI)*, and the Programme for the
Endorsement of Forest Certification® (PEFC) (PEFC/29-31-286).
We supplement this regulation through our own Biomass
Sourcing Policy and supply chain checks. This includes third-
party verification under the Sustainable Biomass Program (SBP),
in respect of woody biomass used at Drax Power Station, which
is also fully compliant with the UK Government’s rule on the use
of sustainable biomass.
Outlook
We are continuing to target post-2027 Adjusted EBITDA of
£600-700 million pa from our FlexGen, Pellet Production, and
Biomass Generation businesses, maximising value from the
business today, while continuing to identify opportunities for
growth across our strategies for flexible, renewable energy.
We will continue to apply our capital allocation policy with
afocus on balance sheet strength, investment in the core
business, and a sustainable and growing dividend. To the extent
thereare residual cash flows beyond the current needs of the
Group, we will also consider additional returns to shareholders.
Through a disciplined approach to capital allocation and
development costs, we expect to create opportunities for
investment in growth and value creation, underpinned by
strongcash generation and attractive returns for shareholders.
Will Gardiner
CEO
25 February 2026
* SFI marks are registered marks owned by the Sustainable Forestry Initiative Inc.
Through a disciplined approach to
capital allocation and development
costs, we expect to create
opportunities for investment
ingrowth and value creation,
underpinned by strongcash
generation and attractive returns
forshareholders.”
12 Drax Group plc Annual report and accounts 2025
CFO’s financial review
Financial performance
Adjusted EBITDA by business
Flexible Generation & Energy Solutions (FlexGen)
Adjusted EBITDA in our Hydro business of £111 million reduced
compared to 2024 (£138 million), reflecting planned outage
work at Cruachan Power Station as part of refurbishment and
upgrade works.
Adjusted EBITDA in Energy Solutions of £49 million (2024:
£51 million) comprised £54 million from our I&C and renewables
services business (2024: £81 million) partially offset by a loss of
£5 million from our Small and Medium-sized Enterprise (SME)
business (Opus) (2024: a loss of £30 million). I&C and renewables
services earnings reflect a similar margin on contracted power
prices to 2024. The sale of the remaining meter points in the
SME business completed in May 2025. The wind down of this
business is now substantially complete.
Introduction
Adjusted EBITDA of £947 million represents strong operational
and underlying financial performance across all segments of
ourbusiness. The decrease compared to £1,064 million in 2024
primarily reflects a lower achieved power price. Total operating
profit was impacted by impairments, as discussed in the ‘Total
operating profit’ section. During the period, we generated cash
from operations of £1,000 million (2024: £ 1,135 million). Our Net
debt: Adjusted EBITDA ratio of 0.8 times (2024: 0.9 times)
remains significantly below our long-term target of around 2
times and during the year we further strengthened our balance
sheet, extending the average maturity of our debt and extending
the Revolving Credit Facility (RCF) by a year to 2028.
Frank Lemmink
CFO
Adjusted EBITDA of £947 million
represents strong operational
and underlying financial
performance across all
segments of our business
Year end 31 December
2025 2024
Financial performance (£m) Total gross profit 1,513 1,877
Operating expenses (641) (761)
Depreciation, amortisation and impairment of non-current assets (621) (256)
Other (10) (10)
Total operating profit 241 850
Exceptional items and certain remeasurements 430 (50)
Adjusted operating profit 671 800
Adjusted depreciation, amortisation and similar charges and share of
losses from associates 275 264
Adjusted EBITDA 947 1,064
Capital expenditure (£m) Capital expenditure 202 321
Cash and Net debt (£m unless
otherwise stated)
Cash generated from operations 1,000 1,135
Net debt 784 992
Net debt to Adjusted EBITDA (times) 0.8 0.9
Cash and committed facilities 942 806
Earnings (pence per share) Adjusted basic 137.7 128.4
Total basic 20.7 137.5
Distributions (pence per share) Interim dividend 11.6 10.4
Proposed final dividend 17. 4 15.6
Total dividend 29.0 26.0
Throughout this document we distinguish between Adjusted measures and Total measures, which are calculated in accordance with International Financial Reporting Standards (IFRS).
We calculate Adjusted financial performance measures, which exclude income statement volatility from derivative financial instruments and the impact of exceptional items. This allows
management and stakeholders to better compare the performance of the Group between the current and previous period without the effects of this volatility and one-off or
non-operational items. Adjusted financial performance measures are described in more detail in the APMs glossary, with a reconciliation to their closest IFRS equivalents in note 2.7.
Return on Capital Employed (ROCE) is calculated as Adjusted operating profit divided by the average of opening and closing capital employed (capital employed is gross assets less
current liabilities). Tables in this financial review may not add down or across due to rounding.
13 Drax Group plc Annual report and accounts 2025Strategic report
CFO’s financial review continued
Adjusted effective tax rate is below the headline corporation
taxrate in the UK of 25% because of benefits from the UK
PatentBox Regime, partially offset by non-deductible expenses.
The exceptional items and certain remeasurements tax credit
of£16 million all related to deferred tax and was the net of
deferred tax on all non-Canadian exceptional items and
certainremeasurements partially offset by the non-allowable
Canadian impairment charge and derecognition of Canadian
deferred tax assets.
Adjusted basic EPS was 137.7 pence (2024: 128.4 pence) and
Total basic EPS was 20.7 pence (2 024 : 137.5 pence). The average
number of shares used in these calculations was 352.8 million
(2024: 383.2 million). The number of outstanding shares at
31December 2025 was 340.4 million, an 8% reduction on
31December 2024 (369.9 million), reflecting the ongoing share
buyback programme.
Capital allocation
Our capital allocation policy remains unchanged and focused
onbalance sheet strength, investment in the core business, a
sustainable and growing dividend and, to the extent there are
residual cash flows beyond the current needs of the Group,
additional returns to shareholders.
Maintain credit rating
During the first half of 2025 the Group extended the maturity
ofthe undrawn £450 million RCF and in July two term loans
totalling c.£171 million were extended from 2027 to 2028.
During December the Group signed a £190 million term loan with
an interest rate of Sterling Overnight Index Average (SONIA) plus
a customary margin. The facility has an option at Drax’s
discretion to extend by two six-month periods. The facility was
undrawn at 31 December 2025 but was subsequently fully
drawn in January 2026.
In August 2025 the CAD term-loan of £109 million was repaid.
InOctober 2025 the remaining £125 million of the 2025 Euro
bond was repaid. In January 2026, term loans totalling
£62 million were repaid.
During the second quarter of 2025, the Group’s Issuer Credit
Ratings were reaffirmed as ‘BB+’ by Fitch and S&P and as
‘BBB(low)’ by DBRS, with a Stable Outlook in each case.
Pellet Production
Adjusted EBITDA of £129 million was below 2024 (£143 million).
The reduction reflects the cost-plus transfer pricing methodology
for shipments to Drax Power Station. This means that cost savings
in the Pellet Production business lead to a lower transfer price,
impacting Adjusted EBITDA. Production in the period totalled
4.2Mt, a record volume for the business (2024: 4.0Mt). Shipments
totalled 5.1Mt (2024: 5.1Mt). Of the 5.1Mt shipped, 3.1Mt was to
Drax Power Station (2024: 3.0Mt). During the period, 1.0Mt of
pellets were acquired from third parties (2024: 1.1Mt).
The US business has performed well, with record production
volumes and margins commensurate with our long-term targets.
The legacy contracts in the Canadian business mean profitability
here is lower, and this is an area of focus for the Group, as
discussed in the CEO review.
Impairments in relation to the Pellet Production business are
documented in the ‘Total operating profit’ section.
Biomass Generation
Adjusted EBITDA from Biomass Generation was £725 million
(2024: £814 million), partially offset by a continued high level
ofgeneration and value from renewable certificates. In addition,
there were no major planned outages in2025.
Drax Power Station produced 15.0TWh (2024: 14.6TWh) of
electricity, a record year for biomass generation and making
itthe UK’s largest single source of renewable energy during
theperiod.
Options for Growth (Innovation, Capital Projects, and Other)
Development expenditure in 2025 totalled £74 million (2024:
£78 million). The reduction reflects the timing of large capital
projects, as described in the CEO review, and therefore a
reduction in the associated spend. We will continue to be
disciplined in the capital and development expenditure deployed
to these projects.
In Other, intra-group eliminations moved to a credit of £7 million
in 2025 from a charge of £3 million in 2024, predominantly due
to a reduction in the volume of pellets in transit compared to the
previous year end.
Total operating profit
Total operating profit was £241 million, compared to £850 million
in 2024. In addition to the factors discussed above, Exceptional
items and certain remeasurements also reduced, from a credit of
£50 million in 2024 to a charge of £430 million in2025. This was
attributable to impairments, gas prices, and foreign exchange
movements. Impairments were recognised forcertain pellet
assets and UK BECCS, whilst continuing depreciation and
amortisation was similar year-on-year.
In Pellet Production, impairment and related charges in Northern
Pellets (Canadian business) were £198 million. Charges in relation
to the Longview project were £138 million and UK BECCS
impairments were £48 million. All of these were classed as
exceptional items. The impairment to Northern Pellets was
driven by a lower growth outlook for the global pellet market
after 2027, particularly in Europe. Linked tothis, the development
project at Longview was paused and nodevelopment is expected
in the near term. Whilst UK BECCS isstill an attractive option for
the Group in the long term, the current political environment and
absence of an appropriate regulatory framework has led to a
reduction in the likelihood ofthe project proceeding in the
short- to medium-term. Accordingly, the capitalised value has
been impaired.
Further information on other Exceptional items and certain
remeasurements can be found in note 2.7.
Profit after tax and Earnings per share
Total net finance and foreign exchange costs for 2025 were
£52 million, a reduction from 2024 (£97 million). Of the reduction,
£24 million was attributable to capitalisation of interest,
£15 million in foreign exchange, and £7 million as a result of
lowercosts in relation to the Energy Solutions receivables
monetisation facility. This was partially offset by a £2 million
reduction in interest received. At 31 December 2025, the
weighted average interest rate payable on the Group’s
borrowings was 5.4% (31 December 2024: 5.4%).
The Adjusted effective tax rate for 2025 of 22% is lower than
2024 (30%), with a key factor being a £nil charge for EGL in the
current year (2024: £161 million) reflecting lower achieved power
prices. EGL is not allowable for corporation tax purposes and the
corporation tax impact of this reduction in EGL was 6%. The
14 Drax Group plc Annual report and accounts 2025
Invest in core business – capital expenditure
Capital expenditure of £202 million (2024: £321 million)
consistsof £98 million of growth expenditure, £72 million of
maintenance, and £32 million of Other (including HSE and IT).
Ofthe £98 million growth expenditure, £26 million related to
BESS assets (2024: £nil) and £23 million related to the OCGTs
(2024: £90 million). The first of the three OCGTs, Hirwaun, is
expected to be under the Group’s commercial control shortly and
the other two units are expected to commence commissioning
during 2026. Growth expenditure also included £15 million in
relation to the ongoing upgrade of Cruachan units 3 and 4
(2024:£34 million).
In October 2025 we announced we had signed an agreement
with Apatura to acquire three BESS projects for £157.2 million.
Completion of the acquisition of the first two projects occurred
in 2025 and completion of the third project is expected soon.
Sustainable and growing dividend
The Board expects to pay a dividend for the 2025 financial year
of 29.0 pence per ordinary share, an 11.5% increase on 2024,
consistent with our policy to pay a dividend which is sustainable
and expected to grow. As has been our practice, 40% of the
expected full year dividend, or 11.6 pence per ordinary share
waspaid as an interim dividend. Subject to approval at the
2026Annual General Meeting, the final dividend will be paid
on15 May 2026.
Return surplus capital beyond current investment requirements
In October 2025, the Group completed a £300 million share
buyback programme which had commenced in August 2024.
TheGroup subsequently began a £450 million share buyback
programme (first announced in July 2025), with an initial
£75 million tranche. In aggregate, during 2025, the share buyback
programmes have purchased c.34 million shares for c.£221 million.
When combined with dividend payments this represents total
returns to shareholders of c.£317 million during 2025.
During 2026, to 24 February 2026, the Group has repurchased
£22 million. We expect the 2025 programme to conclude by
theend of 2028.
Cash and Net debt
Net cash movements
Cash generated from operations, inclusive of working capital,
was £1,000 million (2 0 24 : £ 1,135 million). The net working capital
inflow of £86 million (2024: £122 million) predominantly reflects
a reduction in inventory and receivables, partially offset by a
decrease in payables.
Cash outflows on purchases of property, plant and equipment
and intangibles include repayments of deferred letters of credit
from previous periods. This led to a cash outflow of £294 million,
more than the amount capitalised in the period of £202 million.
Liquidity
Cash and committed facilities of £942 million at 31 December
2025 (31 December 2024: £806 million) provided substantial
headroom over our short-term liquidity requirements. No cash
has been drawn under our RCFs since2018.
Net debt and Net debt to Adjusted EBITDA
31 December 2025
£m
31 December 2024
£m
Cash and cash equivalents 302 356
Current borrowings (61) (119)
Non-current borrowings (918) (1,058)
Impact of hedging
instrumentsand NCI (8) (55)
Lease liabilities (99) (117)
Net debt (784) (992)
Adjusted EBITDA 947 1,064
Net debt to Adjusted EBITDA 0.8 0.9
Going concern and viability
The Group’s operational and underlying financial performance in
2025 was strong. Cash and committed facilities at 31 December
2025 provides substantial headroom over our short-term liquidity
requirements.
The Group refreshes its business plan and forecasts throughout
the year, including scenario modelling designed to test the
resilience of the Group’s financial position and performance to
several possible downside cases. Based on its review of the latest
forecast, the Board is satisfied that the Group has sufficient
headroom in its cash and committed facilities and covenants,
combined with available mitigating actions, to be able to meet
itsliabilities as they fall due across a range of scenarios.
Consequently, the Directors have a reasonable expectation that
the Group will continue to be in existence for a period of at least
twelve months from the date of the approval of the financial
statements and have therefore adopted the going concern basis.
Further, the Directors have a reasonable expectation that the
Group will be able to continue in operation over the five-year
period of the viability assessment, as documented in the Viability
Statement.
Other matters
In January 2026, the Group announced the acquisition of
Flexitricity, an asset optimisation platform, for c.£36 million.
Completion is expected in Q1 2026 and is conditional on
completion of regulatory approvals and processes.
In January 2026, the Group announced a 10-year tolling
agreement with Fidra for 250MW (500MWh) ofBESS, expected
to commence in 2028.
In February 2026, the Group announced a 15-year tolling
agreement with Zenobē for 200MW (800MWh) of BESS,
expected to commence in 2028.
Frank Lemmink
CFO
25 February 2026
CFO’s financial review continued
15
Drax Group plc Annual report and accounts 2025
Strategic report
Our risks:
1
Environment, Health & Safety
2
Political & Regulatory
3
Strategic
4
Biomass Acceptability
5
Plant Operations
6
Trading & Commodity
7
Information Systems & Security
8
Climate Change
9
People
Key performance indicators: Financial
Measure Definition/why it matters Performance Target Link to risks Link to remuneration
Adjusted EBITDA
(£million)
This is our principal financial performance metric,
combining the earnings of each business to give a
Groupoutcome.
The reconciliation of statutory earnings to Adjusted
EBITDA is on page 167.
2
025
2
024
2
023
947
1,064
1,009
The 2025 Scorecard target
range is £810 million to
£990 million.
2
3
4
5
6
7
8
The Adjusted EBITDA performance
measure has a 40% weighting on
the Group Scorecard.
Seepage 106
Adjusted net cash flow
(£million)
This is a key aspect of measuring liquidity through
assessing compliance with the Group’s financial
covenants and is used as a basis by debt rating agencies
to assess credit risk.
Adjusted net cash flow is defined as the net increase or
decrease in cash and cash equivalents, adjusted for cash
flows relating to share buyback programmes and the
refinancing of borrowings.
2
025
2
024
2
023
399
311
280
Adjusted net cash flow targets
for 2025 were £237 million to
£337 million.
3
4
5
6
8
The 2025 bonus Scorecard has a
15% weighting on Adjusted net
cash flow.
Seepage 106
Adjusted basic EPS
(pence)
Earnings per share (EPS) is a key profitability metric to
assess the performance of the Group on a per share
basis.
The calculation of Adjusted basic EPS is on page 171.
2
025
2
024
2
023
137.7p
128.4p
119.6p
The LTIP uses a cumulative
three-year adjusted basis EPS
performance target of 252.5p
to 308.7p. Further details are
included on page 109.
2
3
4
5
6
7
8
Cumulative adjusted basic EPS is
aperformance condition of the
LTIP and has a 50% weighting
measured over a three-year period.
Seepage 108
Adjusted FlexGen &
Energy Solutions EBITDA
(£million)
This is a key measure of the performance of these
operating segments and our ability to manage our
strategy for the combined business.
The reconciliation of statutory earnings to Adjusted
EBITDA and EBITDA by segment is included on page 167.
2
025
2
024
2
023
160
189
302
Targeting Adjusted EBITDA of
£250 million post 2027.
3
5
6
7
8
This is linked to the Group’s
Adjusted EBITDA performance
measure that has a 40% weighting
on the Group Scorecard.
Seepage 106
16 Drax Group plc Annual report and accounts 2025
Our risks:
1
Environment, Health & Safety
2
Political & Regulatory
3
Strategic
4
Biomass Acceptability
5
Plant Operations
6
Trading & Commodity
7
Information Systems & Security
8
Climate Change
9
People
Measure Definition/why it matters Performance Target Link to risks Link to remuneration
Total Recordable Incident
Rate (TRIR)
Keeping our people safe is a core principle. TRIR is
anindustry standard measure of fatalities, lost time
injuries and medical treatment injuries per 100,000
hours worked.
You can read more about health, safety, and wellbeing
in People Positive on page 29.
2
025
2
024
2
023
0.33
0.24
0.38
TRIR of 0.20 per 100,000 hours
worked.
1
9
The safety performance measure
has a 5% weighting in Group
Scorecard.
Seepage 106
Group carbon emissions
Scope 1, 2 and3 (ktCO
2
e)
(1)
We are focused on reducing carbon emissions – as
measured by reductions in our Scope 1, 2 and 3
footprint – which enables us to track progress towards
achieving our near-term and net-zero SBTi targets.
Youcan read more about this in Climate Positive on
page 25.
Scope 1 and 2 Scope 3
2
025
2
024
2
023
1,504
1,808
2,556486
546
557
To achieve our externally
disclosed SBTi decarbonisation
targets, set out on page 25,
which includes a 42%
reduction in Scope 3 emissions
by 2030.
2
3
4
5
6
8
The 2025 Group Scorecard has
a5% weighting on measures
focused on reducing our carbon
emissions.
Seepage 106
Biomass generation
(TWh)
This is an important measure of the renewable power
generation at Drax Power Station and a key part of our
strategy – to be a UK leader in dispatchable, renewable
generation.
2
025
2
024
2
023
14.98
14.63
11.45
To be a UK leader in
dispatchable, renewable
generation.
1
2
3
4
5
6
8
Biomass generation plays a
significant role in the Group
strategy and links to the financial
performance as well as indirectly
linked to other elements of the
Group Scorecard, including
progress on the future of Drax
Power Station.
Seepage 106
Pellets produced (Mt)
Reducing our all-in production cost is a key part of our
strategy. By increasing our pellet production volumes
the all-in cost per tonne reduces through the greater
absorption of fixed costs.
This represents the number of pellets produced
in millions of tonnes.
All-in production costs is defined as direct plant
levelproduction costs plus operations overheads
andport costs.
2
025
2
024
2
023
4.2
4.0
3.8
To optimise the production
volume of sustainable biomass
pellets, delivering the lowest
all-in cost per tonne.
3
4
5
6
8
Progress of the pellet business
model, and in particular all-in
production costs, has a 6.25%
weighting in the Group Scorecard.
Seepage 106
(1) 2023 and 2024 comparator numbers re-calculated (see page 25).
Key performance indicators: Non-financial
17
Drax Group plc Annual report and accounts 2025
Strategic report
ENABLING A SECURE ENERGY TRANSITION
In this section
19 Introduction
22 Safeguarding responsible biomass
sourcing
25 Climate positive
27 Nature positive
29 People positive
31 Task Force on Climate-related
Financial Disclosures (TCFD)
40 Non-Financial and Sustainability
Information Statement
40 Assurance statements
Sustainable
development
Our assets continue to
helpkeep the lights on
for millions ofUK households,
nomatter theweather.
CDP Climate
A (2024: A-)
In 2025, Drax Group received a score
of A (on a scale of A-D-).
CDP Forests
A (2024: A-)
In 2025, Drax Group received a score
of A (on a scale of A-D-).
MSCI
A (2024: A)
In 2025 Drax Group had a rating of A
(on a scale of AAA-CCC) in the
MSSCI ESG Ratings assessment. (1)
Sustainalytics
20.7 (2024: 22)
As of February 2026, Drax Group’s
Sustainalytics ESG Risk Rating was
20.7 – medium risk (on a scale of
1-100 (low-high risk)). (2)
(1) The use by Drax of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and
theuse of MSCI logos, trademarks, service marks or index names herein, do not
constitute a sponsorship, endorsement, recommendation, or promotion of Drax by
MSCI. MSCI services and data are the property of MSCI or its information providers,
and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks
or service marks of MSCI.
(2) Copyright ©2024 Morningstar Sustainalytics. All rights reserved. The information,
data, analyses and opinions contained herein: (1) includes theproprietary information
of Sustainalytics and/or its content providers; (2) may not be copied or redistributed
except as specifically authorised; (3)do not constitute investment advice nor an
endorsement ofany product, project, investment strategy or consideration of
anyparticular environmental, social or governance related issues as part of any
investment strategy; (4)are provided solely for informational purposes; and (5) are
not warranted tobe complete, accurate or timely. The ESG-related information,
methodologies, tool, ratings, data, andopinions contained orreflected herein are
notdirected to or intended for use or distribution toIndia-based clients or users and
their distribution to Indian resident individuals or entities is not permitted. Neither
Morningstar Inc., Sustainalytics, nor their content providers accept any liability for
the use ofthe information, for actions of third parties in respect to the information,
nor are responsible for any trading decisions, damages or other losses related to
theinformation or its use. Theuse of the data is subject to conditions available
atwww.sustainalytics.com/legal-disclaimers.
18
Drax Group plc Annual report and accounts 2025
Introduction
We are committed to addressing these challenges with
transparency and resolve. Our approach includes ongoing
dialogue with stakeholders, continuous monitoring, evaluation
and improvement of our framework and commitments.
One such stakeholder group is our Independent Advisory Board
(IAB), established in 2019 to provide independent scientific
challenge, insight, and advice on biomass sustainability across
our business. The IAB focuses on the science underpinning each
pillar of our Sustainability Framework, climate, nature, and people
positive, and provides robust oversight of the biomass
sustainability practices that support these pillars.
Our priority for the year ahead is to continue delivering against
the Sustainability Framework and to accelerate progress towards
the commitments and targets it sets out. This means embedding
our principles across every part of the organisation, driving
measurable improvements, and ensuring our actions remain
aligned with long-term climate, nature, and people positive
outcomes. By maintaining focus and accountability, we aim
todemonstrate tangible progress and reinforce our leadership
insustainable business.
In February 2026, Chief Sustainability Officer, Miguel
Veiga-Pestana, formally transitioned leadership to Ross
McKenzie. Passion and commitment to sustainability across
Draxhas continued to be one of our core strengths, and Miguel’s
leadership and dedication have been instrumental in bringing the
Company to this point. The Group looks forward with optimism
as Drax continues to build momentum and deliver positive
impacts for climate, nature, and people.
We recognise the important role we play in shaping a more
sustainable future. The environmental, social, and economic
challenges facing society today are complex and urgent, but they
also present opportunities for transformation. Businesses must
lead from the front, and we are fully committed to doing just that.
In 2025, we took meaningful steps to embed sustainability more
deeply into our business, strategy, and purpose:
– we launched our Sustainability Framework, setting out the
milestones ahead and strengthening transparency across our
plans, processes, and operations;
– we voluntarily published our inaugural Climate Transition Plan,
outlining our climate ambitions, targets, and pathways to
delivery, as well as our contribution to the sector-wide
transition to net zero. This significantly expanded the climate-
related information we make publicly available; and
– we also published our Biomass Sourcing Policy, which sets out
the core principles and sustainability commitments that apply
to all biomass in our supply chain. Supported by external
certification schemes, our internal assurance systems, and
independent third-party audits, it demonstrates how we
ensure our biomass is sourced in line with relevant legislation.
Throughout the year, we continued to make progress against
ourScience Based Targets initiative (SBTi) commitments, further
detail is provided on page 25. We saw improved ratings across
selected ESG benchmarks, and inclusion on CDP’s A List
forclimate change and forests – recognition that reinforces
ourposition as a responsible and transparent operator. These
achievements reflect the dedication of our teams and the
integration of sustainability into our strategic decision making.
Yet we remain responsive to the challenges ahead. The evolving
global and regional regulatory landscape, particularly around
biomass sustainability, carbon accounting, and climate disclosures,
demands agility and continued investment. We continue to face
scrutiny from investors, NGOs, and communities who rightly
expect transparency, accountability, and evidence of impact.
Our mission is to help meet
theworld’s increasing demand
for secure energy, sustainably.
For us, sustainability isn’t
aboutwords, it’s about action –
to benefit the climate, nature,
andpeople.
Our Sustainability Framework
This framework is ourroadmap to ensure we’re reaching
meaningful milestones – these pages are coloured in dark blue.
Seenext page
19 Drax Group plc Annual report and accounts 2025Strategic report: Sustainable development
Sustainable development continuedIntroduction continued
Our Sustainability Framework,
launched in 2025, sets out how
we’re taking action to help
decarbonise our operations,
toprotect and enhance nature,
and tosupport people who work
with and alongside us.
The Framework is a result of looking at our successes and
setbacks, listening to stakeholders, and engaging with experts.
Our goal is to ensure we’re on the right path. Our Framework
has26 time-bound targets, grouped into three pillars: Climate,
Nature and People. This is ourroadmap with the ambition to
ensure we’re reaching meaningful milestones, while
demonstrating transparency in ourplans, processes, and
operations.
See more on pages 25, 27 and 29
See our 26 time-bound commitments
SUSTAINABLE BIOMASS
We will reach net zero by the end
of 2040 across our value chain.
We will deliver evidence on forest
carbon stocks in principal biomass
feedstock sourcing areas by the
end of 2026, using rigorous
science-based approaches.
We will further address the
global climate crisis with positive
contributions to climate change
mitigation and adaptation by the
end of 2030.
We commit to sourcing biomass that delivers climate, nature and
people positive outcomes, adhering to strict compliance,
traceability, and third-party certification standards.
We will mitigate harm and
promote circular resource use
across our operations by the
end of 2030.
We will deliver biodiversity
enhancements across all our sites
by the end of 2030.
We will support biodiversity and
ecosystem resilience in our value
chain, contributing to measurable
restoration and conservation
outcomes by the end of 2030.
We will keep building a fair, safe
and inclusive workplace.
We will continue to collaborate
with our supply chain to promote
fundamental human and labour
rights, including those covered by
theUN Global Compact and the
UN Declaration on the Rights of
Indigenous Peoples.
We will partner with the
communities we operate in,
seeking to make a positive
contribution to their lives
and livelihoods.
Our Sustainability Framework
20 Drax Group plc Annual report and accounts 2025
Introduction continued
While launching the Sustainability
Framework represents a critical
milestone, its true value lies in how
effectively we measure progress
against it and demonstrate tangible,
meaningful outcomes. Transparent
reporting mechanisms ensure that
we move beyond intention to action.
Metric Unit 2025 2024 2020 (Baseline)
Climate positive
Group total Scope 1 ktCO
2
e 301 266 1,691
Group total Scope 2 (location-based) ktCO
2
e 256 280 277
Proportion of Group emissions (Scope 1 and 2 location-based)
withinUK % 43 43 87
Group total Scope 3 ktCO
2
e 1,504 1,808 3,088
Group total energy consumption GWh 42,356 41,521 44,451
Group total energy consumption within the UK GWh 38,370 38,294 41,008
Group emissions (Scope 1 and 2) per GWh of electricity generation tCO
2
e/GWh 35 35 117
Direct biogenic CO
2
emissions
(1)
ktCO
2
e 14,085 13,932 13,615
Nature positive
Nitrogen oxide (combined Generation & Pellet Production businessunit) t 7,4 89 7,636
Particulates (combined Generation & Pellet Production businessunit) t 1,275 1,234
Total water abstracted – Drax Power Station m³ 4 4,857,626 44,491,595
Total water returned – Drax Power Station m³ 39,856,691 37,119,03 6
Average biomass supply chain GHG emissions kgCO
2
e/MWh 87.1
(2)
93.7
(3)
Total volume of woody biomass produced – Pellet Production Mt 4.2 4.0
Proportion of woody biomass pellets produced and sold with
anSBPCompliant claim – Pellet Production
(4)
% 97 96.5
Proportion of woody biomass consumed at Drax Power Station
withSBP Compliant claim % 99.9
(2)
98.6
(3)
People positive
Total Group employees
(5)
n 2,974 3,243
Total Recordable Incident Rate (TRIR)
(6)
per 100,000 hours 0.33 0.24
Near Miss and Hazard identification Rate (NMHIR)
(7)
per 100,000 hours 208.96 167.5 6
Women in senior management % 33.9 35.7
Total donations (including Drax foundation) £m 3.1 3.6
This metric was subject to external independent limited assurance by PricewaterhouseCoopers LLP (“PwC”) as part of their assurance over metrics in the ESG
Performance Report 2025.
(1) The biogenic CO
2
emissions, associated with direct combustion, across the Group are zero-rated under the GHG Protocol methodology and our SBTi targets. Biogenic
CO
2
emissions are reported separately as “outside of scope” in ESG reports or under “Memo items” of UK Emissions Trading Scheme (UK ETS).
(2) This metric was subject to external independent limited assurance by Bureau Veritas UK Limited using the assurance standard ISAE 3000. For assurance statement
seedrax.com/sustainability.
(3) Equivalent limited external assurance was obtained over this metric in prior year and results of that assurance can be found in the ESG Performance Report 2024.
(4) Reported figure reflects pellets produced and sold with an SBP Compliant claim. The remaining volume was produced and sold with an SBP Controlled claim.
(5) Total number of Group employees as at 31 December for the reporting year.
(6) TRIR is the total fatalities (2025: 0), lost time injuries, restricted work, and medical treatment injuries per 100,000 hours worked. Total includes incidents and hours of
both employees and contractors across our sites and offices.
(7) NMHIR is the total near misses and hazard incidents per 100,000 hours worked. Total includes both employees and contractors. The calculation methodology has been
updated in 2025 to include employee overtime hours. See Basis of Reporting for more details.
Some of the 2024 and 2020 (Baseline) equivalents for Climate metrics have been restated following the completion of re-baseline in 2025. For further details on this
re-baseline, see page 25.
ESG Performance Report 2025
This report provides additional
environmental, social, and
governance data.
Visit www.drax.com/esg-
performance-report-2025
Policies
For publicly available policies referenced in this section:
Visit www.drax.com/about-us/corporate-governance/
compliance-and-policies/
21 Drax Group plc Annual report and accounts 2025Strategic report: Sustainable development
Safeguarding responsible biomass sourcing
Regions where we source our feedstock
Our biomass operations
Sustainably sourced biomass plays an important role in
supporting energy security as the world decarbonises, displacing
fossil fuels with renewable generation like wind and solar.
However, wind and solar are intermittent. The energy system
needs dispatchable power, such as biomass, pumped storage,
and battery storage that supports intermittent renewables
whenthe sun doesn’t shine and the wind doesn’t blow.
Drax is committed to ensuring the woody biomass we source
comes from forests that are managed in accordance with
standards designed to support their health and growth over
thelong term. We aim for 100% responsibly sourced biomass
that delivers climate, nature, and people positive outcomes,
adhering to strict compliance, traceability, and third-party
certification standards, where relevant.
Our North American operations are strategically located in the
USSouth and Canada. This provides ready access to large tracts
of responsibly managed working forests, modern infrastructure,
and an available workforce of trained loggers, wood haulers,
plant operators and other specialties.
Canadian operations
British Columbia and Alberta, in Western Canada, are among
theworld’s largest exporters of wood products. The respective
Governments of British Columbia and Alberta, in partnership
with First Nations, have procedures, policies, and laws in place
tohelp ensure sustainable forest management practices,
protectimportant forest ecosystems and support the forest
products sector.
In Canadian forests, removing the debris associated with the
primary timber industry is part of a wider set of activities to
mitigate wildfire risk and the spreading of disease and pests. It is
not a good climate or economical outcome to burn forest residue
in forests or at the roadside. We believe that it is better to utilise
this fibre according to strict criteria and best practice, to
generate social value and renewable electricity.
In Canada in 2025, we operated 10 pellet mills across British
Columbia and Alberta, and towards the end of the year we closed
our Williams Lake plant. 85% of our fibre from Canada came
fromsawdust and other sawmill residues created when the mills
create wood products for construction and other industries.
1
US
60.3%
2
Canada
29.1%
3
Latvia
8.9%
4
Estonia
0.6%
5
UK
0.5%
6
Portugal
0.3%
7
Lithuania
0.2%
8
Brazil
0.1%
9
Other
European
0.03%
The forests of the US South
2
1
8
6
5
9
4
7
3
The forests of the US South play an essential role in
delivering climate, nature and people positive outcomes.
Working forests like these store carbon, protect soil and
water quality, provide habitats for many species, and
encourage biodiversity. And while we don’t own or manage
these forests, we’re proud that our sourcing can assist
forest owners in their forest management.
Harvests like the regeneration harvests that landowners
carry out can mimic natural events – such as storm
damage, forest fires, or disease. They allow full sunlight to
reach the ground and new generations of trees to continue
the cycle, absorbing carbon as they grow. It is important
tous to support responsible forest management like this.
CASE STUDY
The remaining 15% of our fibre came from forest residues,
including low-grade roundwood, tops, branches and bark and
salvage trees. Typically, third-party customers in Asia purchase
the pellets that Drax produces in Canada.
US operations
Drax operated seven wood pellet production facilities across
the US South in 2025, with two of these facilities closing by the
end of the year. In this region, over 85% of forestland is privately
owned – primarily by families, with a smaller proportion held by
large forestry enterprises.
Similar to our operations in Canada, our operations complement
the broader forest products industry by creating a reliable market
for forest residues, including low-grade roundwood and material
from thinning operations that is unsuitable for sawtimber
production or rejected by the sawmill. Thinning is a well-
established and widely practiced method of sustainable forest
management in the US South. It plays a critical role in enhancing
forest health, increasing the yield of high-quality sawtimber,
andimproving overall ecosystem productivity.
22 Drax Group plc Annual report and accounts 2025
Safeguarding responsible biomass sourcing continued
Biomass Sourcing Policy
In 2025, we published a revised Biomass Sourcing Policy, which
applies to all biomass that Drax sources. It covers our own pellet
production, and pellets sold to third parties, or used at Drax
Power Station (including biomass pellets purchased from
third-parties). It also applies to potential future uses, such as
pellets used to power data centres, remove carbon dioxide via
BECCS, or use in SAF.
The revised policy is an evolution of the 2019 Responsible
Sourcing Policy. It more accurately reflects our global business
today and developments in regulation and global standards such
as the Renewable Energy Directive III (REDIII) and SBP v2.0.
Wehave structured the new policy around a series of core
principles, building on the wider Sustainability Framework in
seeking to deliver positive outcomes for climate, nature, and
people. At the same time, it is underpinned by a commitment to
compliance, traceability and transparency, and to conducting
open stakeholder engagement.
Drax will continue to use independent third-party certification
schemes as part of the implementation of the new policy.
Drax Power Station
The biomass that Drax Power Station uses must comply with
thestandards set out in law, regulations, and the requirements of
the renewable support schemes under which the plant operates.
The UK Government outlines sustainability requirements for
biomass generation to be eligible for renewable support. To
qualify for subsidies, the biomass received at Drax Power Station
must comply with the Land Criteria and the Greenhouse Gas
(GHG) Criteria. The Land Criteria for wood pellets sets out a
range of measures for sustainable forest management. The GHG
Criteria is a limit, set out by the UK Government, which ensures
that the totality of emissions involved in our biomass supply
chain represents significant GHG reductions compared to fossil
fuels. The current criteria for biomass, in the UK, is to ensure
supply chain emissions do not exceed 180kgCO
2
e/MWh.
We are required to demonstrate, and assure to an ISAE 3000
limited assurance standard, that the biomass we use at Drax
Power Station is consistent with the UK’s sustainability
standards. We therefore report monthly on the amount of
biomass and type of material used, where it came from, and the
GHG emissions from the supply chain. Under UK regulations, we
must also confirm if the biomass complied with the Land Criteria.
At the end of every compliance year, the renewable support
schemes requires us to have an independent third-party audit
toassess the accuracy of our monthly reporting. At Drax Power
Station, to ensure we can identify and track material through
supply chain, we are SBP and PEFC (PEFC/16-37-1769) certified.
We are also FSC® certified (FSC® C119787).
In November 2025, Drax signed a contract with the UK
Government for a low carbon dispatchable CfD. This will support
electricity produced at Drax Power Station between April 2027
and March 2031. The contract includes strengthened
sustainability criteria across three key areas: (1) increasing the
proportion of biomass that must be sustainably sourced from
70% to 100%; (2) reducing the supply chain emission threshold
from 180kgCO
2
e/MWh to 131.76CO
2
e/MWh (aligned with
international best practice); and (3) including provisions to
exclude material sourced from primary and old growth forests
from receiving support payments.
Due to requirements under the low carbon dispatchable CfD,
including lower contracted volumes, it was determined, during
2025, that effective from April 2027, Drax Power Station would
no longer be supplied by the Group’s Canadian pellet plants.
Third-party pellet sourcing
Beyond our own operations, we source third-party pellets from
suppliers across North America, South America and Europe,
foruse at Drax Power Station. In addition, Drax trades pellets
from North America and Europe to meet long-term commitments
to third-party customers. Pellet sourcing undergoes due
diligence, supported by established processes and procedures to
ensure the material is sustainably produced and fully compliant
with our biomass sourcing policy and applicable legislation.
Regulatory and standard developments
REDIII and EUDR
2025 was a crucial year for the implementation of new
regulations covering biomass sourced for use in the EU. Notably
REDIII strengthens biomass sustainability criteria and adopts the
cascading principle to ensure that wood is utilised to its highest
economic and environmental added value.
Meanwhile, despite the 12-month delay of the incoming EU
Deforestation Regulation (EUDR) implementation, 2025
remained a critical year. The EUDR requires companies to
conduct due diligence to ensure wood products are free from
both deforestation and degradation. Whilst Drax’s interactions
with the EU markets are limited, we are supportive of the
legislation’s intent of preventing deforestation and during 2025,
we continued to work towards compliance with both EUDR and
REDIII, with updates provided to the Sustainability Council.
Sustainable Biomass Program v2.0
2025 was a pivotal year for the transition of suppliers to SBP’s
v2.0. SBP is a certification specific to the biomass industry,
where independent certification bodies audit suppliers against
the standards developed by SBP. It is an independent
certification scheme that regulators, including those in the UK
and EU, have successfully benchmarked as a voluntary scheme.
It can be used to demonstrate compliance with sustainability
criteria in the Renewables Obligation and Contract for Difference
at Drax Power Station and with REDIII in the EU.
The v2.0 standards look holistically across the supply chain,
including the management of forests to ensure the health and
vitality of ecosystems are maintained. Compared to SBP v1.0,
therevised standards place a greater emphasis on ‘outcomes’
and include a new principle on forest carbon. Alongside, there
are new and enhanced social requirements strengthening the
protection of workers and their rights. In 2025, all Drax pellet
plants were audited against SBP v2.0 and successfully
transitioned to v2.0 ahead of the November 2025 deadline.
Third-party certifications andaccreditations
FSC®: Forest Stewardship Council®
PEFC: Programme for the Endorsement ofForest Certification
SBP: Sustainable Biomass Program
SFI®: The Sustainable Forestry Initiative
23 Drax Group plc Annual report and accounts 2025Strategic report: Sustainable development