The United Kingdom is the largest consumer of industrial wood pellets in the world, with three large dedicated biomass power stations. Two power stations (Drax Group and Lynemouth Power Station) were converted from coal. The third, Teeside Renewable Energy Station, was a greenfield dedicated biomass generating station that faced various delays in construction but did enter service in 2023. Drax Group and Lynemouth power stations have subsidized power contracts that expire in April 2027, while the Teeside contract expires in September 2038 due to delays in construction.

Drax Group and Lynemouth have expressed interest in deploying BECCS at their facilities, though they have yet to agree on terms for deployment with the current U.K. government. While the companies work towards an agreement for BECCS support, they have signed “bridge agreements” between when the current contracts end in 2027 and 2031, when BECCS is intended to come-online if there is a support scheme in place. The bridge agreements reduce the amount of demand from Drax Group by 62% and Lynemouth by 73%.

In the Q2 2026 Forisk Research Quarterly, Forisk Consulting forecasted three scenarios of U.K. wood pellet demand. Demand falls in the near term in all scenarios. Between 2020 and 2025, the U.K. purchased an average of 67% of U.S. pellet exports. U.S. pellet capacity is 18 million metric tons per year. This implies that 12.1 million metric tons is potentially impacted by these policy changes. Check out the Q2 2026 Forisk Research Quarterly for the forecast results and details.