An independent, third-party economic analysis has shown that UK-headed Drax Group, a leader in sustainable biomass, could contribute more than US$1 billion in total across four southeastern US states in 2023, including US$425 million to the region’s GDP.
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Commissioned by Drax, the report “The economic impact of Drax in the Southeastern United States” was conducted by a team of data scientists and PhD economists at Chmura Economics & Analytics (Chmura).
The analysis measured the economic impact of Drax’s biomass operations in Alabama (AL), Arkansas (AR), Louisiana (LA), and Mississippi (MS), as well as indirect revenues of other businesses supported by Drax’s operations.
The four states are home to Drax’s North American operations that produce pellets using sustainable biomass.
Sustainable biomass entails harvest residuals and low-grade wood, such as tops and branches, low-quality trees, or parts that are diseased or misshapen. This market for low-grade wood helps improve the health and productivity of forests while providing rural counties with a new income stream.
Other highlights from the report included figures on Drax’s history of investment in the region and contribution to key industries:
- From 2013-2022, Drax invested US$884.1 million in the four states, developing wood pellet plants, a port facility, and a corporate office.
- From 2013-2022, capital expenditure for all Drax facilities is estimated to have had cumulative economic impacts of US$368.5 million in spending and US$184.7 million in GDP in the four states.
- The cumulative economic impact of Drax’s operations from 2023 to 2030 is estimated to be US$8.3 billion in total spending and US$3.4 billion in GDP to the four states.
At a time when many families are facing economic hardship, we were very proud to see how sustainable biomass production is providing a multimillion-dollar boost to rural communities. Drax is committed to ensuring the biomass we source delivers positive outcomes for the climate, for nature, and for the communities in which we operate, said Matt White, EVP of North America Operations for Drax.
Pellet expansion and BECCS deployment
Drax aims to increase its global pellet production capacity from around 5 million tonnes per annum to 8 million tonnes by the end of this decade.
Sustainable biomass is set to play an even larger role in combating climate change in the years ahead.
Biomass is a reliable renewable power source and, when paired with carbon capture and storage technology, it can permanently remove CO2 from the atmosphere, which will help the world reach its climate targets, Matt White said.
Drax is pioneering a carbon removals technology – bioenergy with carbon capture and storage (BECCS), which will permanently remove millions of tonnes of carbon dioxide from the atmosphere while at the same time generating renewable power.
With the right support from governments, Drax stands ready to invest billions in deploying BECCS at scale across the globe to cut carbon emissions and generate renewable power for millions of homes and businesses, said Matt White.
A recent study published by the National Renewable Energy Laboratory (NREL), overseen by the U.S. Department of Energy (DOE) forecasts that to deliver the goal of 100 percent clean electricity by 2035, the United States must start deploying BECCS as soon as 2026.