Drax Group plc on Nov. 12 released a trading update, reporting its pellet production business is performing well on increased production and improved margins. The company is also working to develop new market opportunities for pellets, including sustainable aviation fuel (SAF) feedstock.In its trading update, Drax confirmed that the company continues to target post 2027 recurring adjusted EBITDA of over £250&nbsp;for its pellet business. That target could comprise a combination of own-use and third-party sales, from existing and new markets, including SAF, where Drax said is developing a pipeline of biomass sales opportunities in&nbsp;North America,&nbsp;Asia&nbsp;and&nbsp;Europe."We believe that biomass has a growing role to play in the energy transition, such as in the production of SAF,” said will Gardiner, CEO of Drax. “We have also launched our new Elimini carbon removals business which aims to develop projects providing 24/7 power and carbon removals outside the&nbsp;U.K., offering long-term investment opportunities in what we believe could be a major new global market."Regarding its biomass power and proposed bioenergy with carbon capture and storage (BECCS) operations in the U.K., Drax is continuing to engage with the U.K. Department for Energy Security and Net Zero on the potential development of a bridging mechanism to support large-scale biomass generators that are transitioning from their existing renewable schemes in 2027 to BECCS. A <a href="https://biomassmagazine.com/articles/uk-considers-extending-subsidies-for-large-scale-biomass-power-producers">public consultation on that a potential bridging mechanism was open</a> in early 2024.“Drax believes that a bridging mechanism offers the most effective way to build a link between the end of the current renewable schemes in 2027 and BECCS operations,” the company wrote in its trading update. “Consistent with the position set out by Drax in 2023, clear policy support and milestones (including details of the subsequent allocation rounds for carbon capture and storage (CCS) projects and transportation &amp; storage processes) are required to unlock further investment in the development of BECCS at&nbsp;Drax Power Station.”Drax also indicated it has identified opportunities to supply power to data centers. The company said it has received positive engagement with data center providers in relation to the potential to collocate a data center with biomass generation featuring BECCS and is continuing to explore such opportunities.&nbsp;A full copy of the trading update is available on the Drax <a href="https://polaris.brighterir.com/public/drax_group/news/rns/story/wv31yzr">website</a>.

2024-11-12 - Drax reports improved pellet margins, new market opportunity in SAF feedstock supply  (2 publications)

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Drax Group plc on Nov. 12 reported its pellet production business is performing well on increased production and improved margins. The company is also working to develop new market opportunities for pellets, including SAF feedstock. 

Drax reports improved pellet margins, new market opportunity in SAF feedstock supply

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