Contracts to supply 2.8Mt of biomass
14 December 2021
Drax Group plc
("Drax" or the "Group"; Symbol: DRX)
Contracts to supply 2.8Mt of biomass to third parties - 2022 to mid-2030s
Drax is pleased to announce that its subsidiary Pinnacle Renewable Energy Inc has agreed to acquire the pellet sales contract book of Pacific BioEnergy Corporation, adding 2.8Mt of orders for sustainable biomass supply to high-quality counterparties in Japan and Europe. These contracts are for delivery between 2022 and the mid-2030s, of which 0.3Mt is for delivery in 2022. The total incremental revenues over the contract period are around C$675 million.
The deal complements the Group's existing supply contracts to Asian counterparties and European generators, increasing the Group's long-term third-party sales book by 15%, to around 23Mt, with total revenues of over US$4.5 billion.
Will Gardiner, Drax Group CEO, said: "This deal supports Drax's ambition to double our sales of sustainable biomass by 2030 to markets in Asia and Europe where demand for biomass is increasing as countries transition away from coal. It also demonstrates Drax's commitment to the growth of sustainable biomass in Japan specifically, where we expect to establish a new office in 2022.
"We look forward to working with our partners in Japan and other markets across Asia and Europe as part of our aim to be a global leader in sustainable biomass, making an even greater contribution to the world's efforts to reach net zero."
Drax aims to double sales of biomass to third parties to at least 4Mt pa by 2030, developing its market presence in Asia and Europe, facilitated by the creation of new business development teams in Tokyo and London during 2022.
Drax is a major producer, supplier and user of biomass, active in all areas of the supply chain with long-term relationships and almost 20 years of experience in biomass operations. The Group's innovation in coal-to-biomass engineering, supply chain management and leadership in negative emissions can be deployed alongside its large, reliable and sustainable supply chain to support customer decarbonisation journeys with long-term partnerships.
Enquiries:
Drax Investor Relations: Mark Strafford
+44 (0) 7730 763 949
Media:
Drax External Communications: Ali Lewis
+44 (0) 7712 670 888
Website: www.drax.com
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