Drax, the British owner of wood pellet plants in Mississippi and Louisiana that has paid millions in fines and settlements for violating state pollution laws in recent years, has received at least $762 million in “green” loans during that same period, an investigation by The Examination, The Toronto Star and Mississippi Today found. 

The energy company ships out wood pellets made in North America for other countries to use as a power source to meet their carbon reduction goals. But state regulators in both Mississippi and Louisiana have come down on Drax over its local air pollution. Between penalties and settlements over the last five years, Drax has had to pay out over a combined $5 million to the two states. 

Since 2018, banks have issued $1.5 trillion in low-interest “sustainability-linked loans,” or SLLs, to large corporations to motivate climate-friendly practices. Wood biomass companies, such as Drax, alone received over $76 billion in SLLs between 2018 and 2023, the investigation found using data from the London Stock Exchange and the Environmental Paper Network.

Drax received two such loans: one in 2020 that became the equivalent of $553 million – issued by a group of banks including Bank of America, Barclays and JP Morgan – and another in 2021 equal to $208 million.

While companies have environmental benchmarks that go with the loans, there’s little oversight or public disclosure over what those goals are or whether the companies accomplish them. Drax maintains it has reduced its overall carbon footprint since receiving its SLLs; according to its most recent annual report, the company lowered its carbon emissions by 27% from 2020 to 2023. 

However scientists around the world have argued for years that using wood pellets for electricity actually creates more carbon emissions than using coal or gas. Not only does burning pellets release carbon into the air, but so does cutting down the trees – which store carbon and take years to regrow – to make the pellets.

“As numerous studies have shown, this burning of wood will increase warming for decades to centuries,” hundreds of professors and other experts wrote in a 2021 letter to world leaders including President Biden. “That is true even when the wood replaces coal, oil or natural gas.”

Despite the wide-ranging contentions, global industrial leaders like the United Kingdom have embraced biomass, including wood pellets, as an energy source. The U.K.’s 2024 “Clean Power 2030 Action Plan” says biomass could be an important part of its transition to clean energy, and in 2023 a quarter of the country’s renewable energy generation came from “biogenic” sources such as biomass.

In a written response to questions for this story, Drax defended the use of pellets for electricity.

“While we recognize that there is an on-going debate with respect to the range of solutions required to most effectively combat the climate crisis, we believe that energy from biomass, when sourced sustainably, is an important contributor to the decarbonization of electricity generation,” the company said via e-mail.

But Drax, which mostly uses wood from the United States and Canada, recently came under fire over how it sources its pellets. Last year, the UK government issued a 25 million pound fine to the company, in part because Drax failed to fully detail where it sourced wood pellets made in Canada. 

In Mississippi, environmental regulators fined the company $225,000 last year for releasing 50% over its permitted limit of hazardous air pollutants, or HAPs, from its plant in the small town of Gloster. But meanwhile, the company is applying to become a “major” source of HAPs, a designation that allows greater emissions with added pollution reduction controls. 

Allison Brouk, a senior attorney for EarthJustice, said it doesn’t make sense that Drax gets to graduate through the regulatory system the way it has.

“They applied for a minor source permit, emitted at major source levels until they were fined and (state regulators) made them change that,” Brouk said. “It’s a pattern Drax has taken, somehow, just to work with the system.”  

Last year’s fine was Drax’s second in Mississippi for violating air pollutant limits. In 2020, the state fined Drax $2.5 million, one of the largest such penalties in state history, for emitting over three times the legal limit for volatile organic compounds, or VOCs. Shortly after the fine was announced, Drax announced receiving its first SLL. 

State regulators found that Drax also exceeded its legal limit of VOC releases at its two plants in Louisiana. While the company didn’t have to admit to any wrongdoing, Drax agreed to pay a  combined settlement of $3.2 million in 2022. It was the largest amount paid to the Louisiana Department of Environmental Quality in the last decade, The Times-Picayune reported. 

In September, Drax announced plans to invest $12.5 billion to develop its biomass operation in the U.S. with added carbon capture and storage technology, Reuters reported. Groups like the National Resources Defense Council, though, argue that the technology will only lead to greater emissions.  

While the intended goal of SLLs is to encourage sustainable practices in large corporations, loan recipients in some cases have framed their emissions metrics in misleading ways, The Examination found. To read the outlet’s full investigation into the world of SLLs, click here.

This investigation is reported in partnership with The Examination, Mississippi Today and Toronto Star. This reporting was supported by the Pulitzer Center’s Rainforest Investigations Network.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

A House committee passed a major tax cut plan on Tuesday evening that would eventually abolish the state income tax, reduce taxes on groceries, increase local sales taxes and provide more money for road work.

The plan would over time cut about $1.1 billion from the state’s current revenue. Proponents say economic growth will cover this, and not result in major cuts to government services or spending.

“This is one of the most transformational pieces of legislation that this state has ever seen,” House Ways and Means Chairman Trey Lamar said in the committee meeting. 

The legislation passed the GOP-majority House committee with no audible opposition, though Rep. Robert Johnson III, the House Democratic leader, raised concerns that the state’s budget may not collect enough revenues in the future to offset the tax cut.  

The legislation would reduce the income tax rate from 4% to 3% next year. Then, it would reduce the rate by .3% each additional year until the tax is eliminated in 10 years. 

The plan also trims the 7% sales tax on groceries to 2.5% over time. Under current law, Mississippi’s 7% sales tax is split between the state and municipalities where the tax is collected. To shore up the loss, the legislation would end the state’s 18.5% sales tax diversion to municipalities, meaning the full sales tax collected will go to the state budget. 

To make municipalities whole, the bill adds a general 1.5% local sales tax for both municipalities and counties that the local governments can vote to opt out of. The tax collected by the counties would go toward local road maintenance.

Oxford Mayor Robyn Tannehill, an independent, attended Tuesday’s Ways and Means meeting and told Mississippi Today she supports the local 1.5% local sales tax because it means additional revenue for municipalities in the state. 

“I’m supportive of any bill that increases revenues for Oxford, Mississippi,” Tannehill said. 

The legislation also adds a new 5% tax on gasoline sales, which would go toward the Mississippi Department of Transportation’s budget for road and bridge infrastructure. The tax is expected to generate $400 million a year. Currently, Mississippi has an 18.4 cents-a-gallon flat tax on gasoline — a flat rate no matter the cost of a gallon. Transportation leaders have for years said they need an indexed tax that would rise with the cost of gasoline in order to generate enough money to keep up road maintenance.

Using the current average gasoline price in Mississippi of $2.62 a gallon, the proposed new tax would cost consumers 13 more cents a gallon.

Lamar, a Republican from Senatobia, said he intends to bring the bill up for a full House vote this week, and it’s expected to pass the 122 member chamber. But the legislation is several steps away from becoming law. 

Once the legislation passes the House, it would likely head to the Senate Finance Committee, which is led by Republican Sen. Josh Harkins of Flowood, for consideration. Harkins has not yet responded to the House’s legislation, but he previously told Mississippi Today the Senate will unveil its own tax cut package in the coming weeks. 

If the House and Senate agree on a tax cut measure, it would head to Republican Gov. Tate Reeves’ desk for consideration. Reeves has been a vocal champion of eliminating the income tax, but it’s unclear if he would support all of the House’s latest tax cut measure. 

Lamar on Tuesday night told reporters that he had spoken with Reeves’ office, and he believes the governor will offer his support to the legislation. The governor’s office did not respond to questions about his stance on Lamar’s legislation. 

Reeves in past years has opposed what he called “tax swaps,” tax cut proposals that sought to decrease the overall tax burden, yet raised another type of tax such as the latest House proposal. He’s also opposed past efforts to raise the gasoline tax. 

“If a bill comes to my desk that doesn’t raise any other taxes that cuts the grocery tax and cuts the income tax, I’m fine with that,” Reeves said last week at a press conference. 

Reeves, in 2021 notably opposed an effort led by Lamar and former House Speaker Philip Gunn that sought to eliminate the income tax and cut the sales tax on groceries in half while increasing the sales tax on other items by 2.5 cents on the dollar. 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

In this episode of Mississippi Stories, Mississippi Today Editor-at-Large Marshall Ramsey took a tour of one of the best kept secrets in Jackson with Chris Lockhart of Capital City Kayaks. What started as a hobby to explore the green side of the capital city has turned into a family-fun spot for tourists and Jacksonians alike.

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This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

The post Mississippi Stories: Chris Lockhart of Capital City Kayaks appeared first on Mississippi Today.