U.K. moves Drax carbon capture permit into public review stage

The Environment Agency on May 28 said it was minded to grant Drax a permit variation for carbon capture at Drax Power Station near Selby, North Yorkshire, opening a public comment period that runs through June 24. The draft decision does not authorize construction, but it moves the company’s long-running BECCS plan out of the concept stage and into a formal regulatory test of whether the project can meet environmental requirements under the Environmental Permitting Regulations.

The variation would allow a post-combustion capture system at the biomass plant, along with supporting changes to the effluent treatment system, flue-gas layout, quencher tower, ash handling infrastructure and hydrogen production activity. If Drax ultimately builds the project, the captured carbon dioxide would be sent by pipeline for permanent storage under the North Sea. The regulator said it had reviewed comments and evidence from two previous consultations and currently saw no reason to refuse the variation, while stressing that a final decision will come only after it considers responses to the draft decision.

The procedural path has been long. Drax first applied to vary its permit in May 2023, then faced a request for more information after the first review. The Environment Agency followed with a second consultation in February 2025, before opening the current draft-decision stage on May 27, 2026. That makes the latest step less a surprise than a marker of how slowly BECCS has advanced from corporate presentation to permitting reality.

For Drax Group plc, the permit review lands in the middle of a broader capital discipline push. In its 2025 full-year results, published February 26, 2026, the company said its low-carbon dispatchable Contract for Difference covers all four biomass units at Drax Power Station from April 2027 to March 2031, and that its capital allocation policy remains focused on balance-sheet strength, dividends and returning surplus cash to shareholders. Drax’s annual report says it expects to initially allocate more than £1 billion of free cash flow to shareholder returns over 2025-2031.

That tension explains why the permit matters beyond one site. Drax’s 2023 capital markets materials targeted about 8 million tonnes a year of carbon removals at Drax Power Station by 2030, but the company has also said clear government policy support and milestones are still needed to unlock further BECCS investment. The draft permit shows the engineering case is still alive, yet the harder question remains whether policy support, transport and storage access, and project economics line up well enough for Drax to commit billions.