Market Intelligence Report: Sourcing Economics, Certification Standards & Carbon Accounting
The global trade in wood pellets for power generation has reached 48 million tonnes annually in 2026, dominated by demand from the UK (Drax), EU (Orsted, RWE), and Japan/Korea. Drax Power Station, operating the world's largest biomass power project (2.6 GW), consumes over 7.5 million tonnes of pellets annually. This supply chain faces intensifying scrutiny over "carbon debt" and biodiversity impacts.
Once Western Europe's largest coal plant, Drax has completed its transition to biomass. Its operational configuration in 2026 reflects a mature, if controversial, reliance on imported wood pellets:
| Unit Status | Capacity (MW) | Fuel Source | Annual Fuel Consumption | Subsidy Mechanism |
|---|---|---|---|---|
| Unit 1-4 (Biomass) | 2,580 MW (Total) | Imported Wood Pellets | 7.2 - 8.0 Mt | CfD / RO (Expiring 2027) |
Drax's pellet sourcing footprint is vast, revealing the complexities of the trans-Atlantic biomass trade. Sourcing distribution in 2025-2026:
| Region | Share of Supply | Primary Feedstock Type |
|---|---|---|
| US Southeast | 65% | Softwood pine pulpwood, residues, thinnings |
| Western Canada | 18% | Sawmill residues, forest residues, beetle-kill wood |
| Baltics | 10% | Roundwood, sawmill residues |
The delivered cost of pellets to Drax is typically £140-170 ($175-215) per tonne. Cost structure breakdown:
The Controversy: Burning wood emits more CO₂ per MWh than coal at the smokestack (~900g/kWh vs ~850g/kWh). "Carbon neutrality" assumes forest regrowth re-absorbs this CO₂. However, climate scientists argue this creates a carbon debt lasting decades.
The Controversy: Investigations have documented usage of whole logs from primary forests labeled as "low-grade roundwood," violating the spirit of "waste/residue" rules.
Goal: Capture 4-8 million tonnes CO₂/year from biomass units by 2030.
Technology: Post-combustion amine capture (MHI technology license).
Economics: Requires distinct business model—receiving payment for Negative Emissions (Carbon Removals).
The biomass pellet supply chain occupies a precarious position. For Drax, the pivot to BECCS is existential. Without carbon capture, the rationale for burning imported wood will weaken as wind/solar costs fall.
Analysis based on: