Top 40 UK firm Mishcon de Reya is advising a consortium of environmental groups on a 'landmark' complaint before the Organisation for Economic Cooperation and Development (OECD) alleging UK power company Drax Group is making misleading statements about its green credentials.

The complaint has been lodged by the Forest Litigation Collaborative, which challenges Drax's claims that its use of biomass for power generation 'meets the highest sustainability standards' and alleges the power company is thereby misleading consumers and violating rules on responsible business conduct.

"This is a critical complaint at a critical moment," said Mishcon litigation partner Alexander Rhodes, who is advising on the project on a pro bono basis along with managing associate Andrew Short. He added: "This complaint to the OECD seeks an examination of Drax’s representations that it is effectively carbon neutral, and part of the solution to the energy carbon crisis."

Elsie Blackshaw-Crosby, managing lawyer at UK-based The Lifescape Project, which is spearheading the claim, added that the group hoped Drax would "engage in mediation of this complaint" and withdraw the statements in question.

Drax describes itself as a UK-based renewable energy company and owns and operates a power plant in Selby, North Yorkshire, that generates electricity by burning wood pellets imported from the US, Canada and EU countries including Estonia.

The complaint alleges that Drax’s public statements wrongly portray its use of woody biomass, which is classed as a renewable energy source in the UK and EU and therefore attracts government subsidies, as a carbon neutral form of energy. 

It claims burning woody biomass emits more carbon emissions per unit of energy than coal and that it takes a significant amount of time for the trees used to make pellets to regrow and offset the equivalent amount of carbon, while logging forests for trees also contributes to biodiversity loss. 

-------------

Read The Global Legal Post ESG Timeline

-------

In a statement to the Financial Times, Drax said: "The world’s leading authority on climate science, the UN’s IPCC, is absolutely clear that sustainable biomass is crucial to achieving global climate targets. The science underpinning carbon accounting for bioenergy is also crystal clear. It was set out by the IPCC and then reaffirmed by them in 2019 following review by thousands of the world’s leading climate scientists."

Earlier this year, Drax cemented its goal of becoming a leading woody biomass electricity generator with a $652m deal to double its production of wood pellets by purchasing Canadian biomass company Pinnacle Renewable Energy. A team from Slaughter and May, led by partner Victoria MacDuff, advised Drax on the deal, working with lawyers from Canadian firm Osler Hoskin & Harcourt. 

The deal was opposed by more than 20 environmental organisations, which published an open letter urging Drax’s shareholders to vote against the acquisition. In the event, 95.97% of Pinnacle’s and 99.99% of Drax’s shareholders voted in favour of the deal.

International NGOs collaborating in the complaint to the OECD include US-based Partnership for Policy Integrity, Conservation North in Canada, the UK’s Biofuelwatch and Tallinn-based ecological advocacy group Save Estonia’s Forests.

Earlier this month, the Canadian group Lawyers for Climate Justice (L4CL) published an open letter urging Prime Minister Justin Trudeau and the incoming minister of justice and attorney general to protect Canadian citizens from the destabilising effects climate change poses to their fundamental rights by reviewing "all federal statutes and forthcoming bills through a climate justice lens and...ensure that vulnerable populations are meaningfully protected".