DRAX shares tumbled by 8 per cent this morning after financial regulators launched an investigation into whether the tree-guzzling power station made misleading statements about the sourcing of wood pellets.

The Financial Conduct Authority (FCA) confirmed the probe will cover a period over two years, from January 2022 to March 2024, and examine annual reports from 2021-2023. 

It comes after Drax’s former head of public affairs and policy, Rowaa Ahmar, accused the firm of misleading the public over the sourcing of its wood for biomass pellets in a now-resolved employment tribunal in March. 

Drax denied her claims and said it will “co-operate with the FCA as part of their investigation.”

Last year, a BBC Panorama investigation accused Drax of continuing to burn wood from environmentally important forests, after the programme first made the discovery two years ago. 

The company receives government subsidies for burning wood pellets, classed as renewable energy. 

By 2027, when its current subsidies expire, it will have received more than £10 billion, according to think tank Ember.