Drax has announced it will withdraw as a partner of a £1 billion carbon capture and storage (CCS) project in the UK when it is completed.
The two-year White Rose CCS project is being developed by the Capture Power partnership, which is made up of Drax, Alstom and BOC.
It is looking at the potential to capture up to 90% of carbon emissions from a new coal-fired power station and store them safely beneath the North Sea.
Drax said it would not commit to further investment after the project ends in the next six to 12 months.
Pete Emery, Drax Group Operations Director and Capture Power Board Director said: “We remain fully committed to completing what we’ve signed up to – the completion of a study into the feasibility and development of world leading technology that could result in dramatic reductions in carbon emissions produced by power stations and heavy industry.
“We are confident the technology we have developed has real potential but have reluctantly taken a decision not to invest any further in the development of this project. The decision is based purely on a drastically different financial and regulatory environment and we must put the interests of the business and our shareholders first.”
Earlier this year Drax saw its shares plunge following the UK Government’s decision to scrap the Climate Change Levy exemption for renewable electricity.
It started legal proceedings against the government for not providing enough notice when it made the announcement.