Progress update on independent audit of Drax: first phase completed

Auditing Drax’s annual profiling data and associated reporting

Annual profiling data is the reporting of ‘additional biomass characteristics’ and is not used for the issuing of Renewables Obligation Certificates (ROCs). This audit is being conducted by Forvis Mazars following their appointment by Drax in September 2025.

This is a non-financial audit, focusing on operational and compliance data and relates to Drax’s international supply chain and their legal obligations to the Renewables Obligation (RO) scheme. The scope of the audit is restricted to forest type and sawlog content profiling data.

The audit is being undertaken to a “reasonable” level of assurance as set out in the internationally recognised ISAE 3000 standards. Alongside the assurance report, Forvis Mazars will also produce a forward‑looking report assessing the process changes Drax has already implemented and provide recommended actions, to strengthen the reliability and confidence of future annual RO profiling data reporting.

Drax committed to the audit following an Ofgem enforcement investigation into the company. At the time, Ofgem’s investigation found an absence of adequate governance and controls in place, which contributed to Drax misreporting forest type and sawlog data in relation to Canadian consignments, as part of their annual profiling submission to Ofgem for compliance period 1 April 2021 to 31 March 2022.

As a result of the misreporting, the company made a £25 million payment into Ofgem’s Voluntary Redress Fund and resubmitted that data. They also agreed to conduct an independent audit of the profiling data covering 98% of their global supply chain for 2023 to 2024, which is now underway.

Phase one of the audit

Forvis Mazars has now completed the first phase of their independent global audit in line with the terms of reference agreed between Ofgem and Drax. This marks an important milestone in the delivery of this audit.

The first phase consisted of a review of the forest type and sawlog content of woody biomass sourced from Canada. This included activities that linked to Drax’s reporting methodologies and their governance and controls which underpinned the preparation, review and submission of forest type and sawlog content data to Ofgem for their profiling data. Canada was selected as the focus for phase one based on Forvis Mazars’ risk assessment and materiality procedures. In Ofgem’s role as an active observer, and incorporating insights gained through our enforcement investigation, we provided targeted feedback to ensure confidence in the outputs of the commissioned audit. These learnings will also be taken forward into the completion of phase two.

Phase one conclusions

Initial findings by Forvis Mazars assessed the reporting for phase one to be materially correct, however, identified that Drax’s processes and controls in place to report the relevant data for their CP22 annual profiling data would benefit from further documentation. This extended to the documentation of review processes, interpretations, and assumptions, and Forvis Mazars has noted Drax has subsequently taken steps to improve this.

The initial audit review findings by Forvis Mazars for Phase one need to be considered in the context of their wider review, which is still underway.

While Forvis Mazars’ audit review is not focused on the issuance of ROCs to Drax, Ofgem is not aware of any issues with the level of subsidy Drax has received under the RO scheme in 2023 to 2024 financial period, and the audit review findings to date have not suggested to Ofgem any new or additional compliance issues that require further investigation.

Next steps

Work will now continue to review the remaining jurisdictions that fall within the agreed audit scope. As part of the tripartite arrangement, which has been constructive to date, Ofgem remains engaged throughout the audit process as an active observer. This is to ensure confidence in the robustness and independence of delivery of the audit.

We will not be publishing the detailed audit report or the forward‑looking report. Given the extensive nature of the review, the audit documents contain commercially sensitive information. However, once all audit work has been completed, we have committed to publishing a summary of the findings to ensure transparency. While Ofgem currently has no reason to believe there have been further instances of non-compliance, we will not hesitate to act if required.