An FCA investigation is serious, so ministers should make Drax wait for its next subsidy deal

In regulatory terms, accurate reporting to investors and the market is a very big deal. Officials will be obliged to go deep

- Nils Pratley

There is already a scandal of bad accounting at Drax, one could say mischievously. It's the one that maintains transporting wood pellets from North America to burn in North Yorkshire is a "carbon neutral" activity because replacement trees absorb CO2 as they grow. You don't have to be a green lobbyist to think there's something wrong there. As the research group Ember regularly reminds us, Drax is the UK's biggest emitter yet qualifies for renewables subsidies.

That weirdness in the methodology is one for the government to justify. The Financial Conduct Authority's investigation is into the grittier issue of Drax's "historical statements" about its sourcing of wood pellets. Three sets of annual accounts – 2021, 2022 and 2023 – are in the spotlight for adherence to listing rules for quoted companies and transparency disclosures.