I don’t believe it! Are you sure he said that? My source was. Sometimes political lobbyists have to look to the heavens and give thanks. For Kwasi Kwarteng had told the truth. In a meeting with opposition MPs the energy secretary had declared his department’s policy of burning millions of trees a year in the Drax power station was “not sustainable”. He said it “doesn’t make any sense to me at all” and that BEIS was close to deciding to “just draw the line and say this isn’t working, it doesn’t help carbon emission reduction and so we should end it.”
Good news for trees. Bad news for Drax. It has built its business model around burning trees. And BEIS had been planning to extend Drax’s current tree-burning contract beyond its current 2027 end date, all the way to 2050.
I gave the story to the FT. And when it published it on 11 August the market valuation of Drax crashed by £280 million. The panic was not just among its shareholders.
As the news ricocheted around BEIS, the department and its friends at Drax commenced the mother of all damage limitation operations.
The Times headline was “Drax feels the heat thanks to ‘unhelpful’ Kwarteng”. But Kwarteng too was feeling the pressure. Within hours his officials announced that he was back in the fold and now “fully backed” the policy. The FT’s Lex column surmised that “furious power companies and bureaucrats had presumably applied thumbscrews.”
What does this tell us about the man who in September’s game of musical chairs is hotly tipped to end up in the Chancellor’s seat?
Negatives first. By his own words Kwarteng denounced the green credentials of burning trees. Yet since he joined BEIS, his department has forced consumers to pay £2.5 billion of renewable subsidies to Drax. Such sacrifices can be demanded for genuinely green policies – not for corporate welfare. At a time of rising rage over fuel poverty the Drax tax is utterly unconscionable.
Kwarteng also told MPs that his department had not properly scrutinised the sustainability of burning trees: “We haven’t actually questioned some of the premises”. What else has BEIS not been questioning? The energy crisis we face is largely down to what the army calls “piss poor planning”.
On the other side of the ledger, Kwarteng’s analysis was spot on. He said that since he “became energy minister three years ago, biomass hasn’t really gone anywhere… we’ve seen other technologies accelerate much more quickly.”
Wind, solar and nuclear are advancing. Hydrogen and battery technology are exciting. Yet burning wood remains burning wood – still creating even more CO2 than the coal it replaced. We are edging towards a future when better batteries and grid interconnectivity mean that we will have no need for burning gas, coal or wood. No wind and no sunshine would no longer mean no power.
Drax’s CEO, Will Gardiner, has however bet the ranch on wood. And he is desperately trying to lock BEIS into the 2050 commitment. Yet long before that modern technologies will have turned Drax’s wood burning boilers into a stranded asset. The question is whether Drax or BEIS will be picking up the tab.
The biggest virtue shining through this recording is that Kwarteng was telling the truth about the policy he had inherited. He frankly told MPs about how deeply flawed it is.
He has seen how top think tanks including Chatham House and EASAC have turned against wood burning. He has seen the IPCC scaling down its bioenergy projections and the EU’s Frans Timmermans, saying “I hate the images of whole forests being cut down to be put in an incinerator. I think it’s unsustainable and it’s indefensible.”
Kwarteng has also seen the front-page stories in the Telegraph saying that his department’s plan to massively expand bioenergy would require burning 120 million trees a year. The New Forest only has 46 million trees. Kwarteng knows it makes no sense. He knows it is a blind alley. And he said it.
Yet why did his department push back so strongly? It was not just the embarrassment that flows from BEIS being contractually locked into a policy that “makes no sense” for the next five years. It is much worse. For BEIS’s core mission is to deliver the Great Pledge of our political class – Net Zero by 2050. For that to happen ‘negative emissions’ will be needed to offset residual positive emissions – such as private jets.
BEIS says that the vast majority of those negative emissions will be supplied… by Drax burning trees. For a mere £31 billion, Gardiner will magic up these negative emissions so long as you believe two impossible things. The first is that he can capture all the carbon being created by burning trees: impossible – the diesel fumes belching out of the bulk carriers carrying wood across the Atlantic is just part of the problem. The second conceit is that the trees he burns immediately grow back: pesky academics suggest the carbon payback period could be 190 years.
Without these putative negative emissions, the BEIS Net Zero spreadsheet doesn’t balance. So officials had to get Kwarteng to reverse his remarks so that they would not be left without the pretense that they can get to Net Zero. The magic trick would have been exposed. The pathway to the Great Pledge disappeared.
As for Gardiner, he is a motivated man. Some £3 million a year of those subsidies ends up in his paycheck. An awful lot of the rest of the subsidies goes into Drax’s influence operation which has the unholy task of using public money to ask for more.
It is difficult to exaggerate how embedded Drax has become in Whitehall. Official records show that Drax has had 32 meetings with Kwarteng since he joined BEIS in 2019. Yet it took 84 MPs eight months to convince BEIS to allow them 20 minutes with him. That was this month’s fateful meeting.
In it, Kwarteng explained to the MPs how he had been robustly challenging Gardiner but was reluctant to completely drop wood burning because he was “hugging the mast” of the Climate Change Committee. This is the official advisory body which still backs some wood burning. Perhaps that is because Drax had one of its top executives also working in the CCC until last year when Lord Randall called this out.
Drax spends vast sums on lobbyists. That is not subtle, given how many politicians “fail” into lobbying. Nor is it subtle how Drax drip feeds sponsorship money across the media to keep journalists on side. The Spectator is a particular target for Drax’s largesse. Can you imagine any of its journalists asking Andrew Neil for permission to write a story about Drax? More than their job’s worth.
Kwarteng’s unambiguous comments to MPs broke the omerta. His environment colleague Lord Goldsmith had started the truth-telling last November during COP26 when he admitted the “real problems” with burning trees. Even the Climate Change Committee has edged towards the inevitable policy reversal by saying that “the vast majority” of trees burnt at Drax should in future be UK grown. That is not close to realistic as every single one of the trees currently burned at Drax is imported. We simply don’t have the forests for Drax to devour.
This summer Sir David Attenborough called current policy “alarming”. The FT said it is “bonkers”. The smart thing for BEIS officials would be to take refuge under the IPCC’s latest thinking. It says that technologies which can reduce positive emissions are showing much more promise than those which could create negative emissions. This means that not yet knowing where negative emissions might come from is less of a problem. BEIS now has options – it no longer has to create environmental outrage around the world by racing down the Drax cul-de-sac. It can instead lean into new technologies, not try to pretend that burning forests is the future. That’s what you do in yurts.
Drax needs a Plan B. For the dam was already breached before Kwarteng’s remarks. Now that he has spoken of the “absurdity” of BEIS’s superannuated policy you can imagine what my team will do in our campaign to save trees. Before his comments we were already getting front page stories. Now the media will smell blood. MPs will smell fear. BEIS must move fast to ensure that the incoming energy secretary does not get mortified by constantly being asked “do you agree with Kwasi?”
Ian Gregory runs the Abzed political and media relations consultancy.
