Business
JV and sale of ash to low-carbon cement industry
JV and sale of ash to low-carbon cement industry.
About this update from Drax Group Plc
[{"type":"text","content":"\n\n27 March 2025\nDrax Group plc\n(\"Drax\"; \"The Group\"; Symbol: DRX)\n \nJoint Venture and 20-year agreement for sale of ash to low-carbon cement industry\n \nDrax Power Limited has agreed a 20-year joint venture (JV) agreement with Power Minerals Limited (PML) which will allow for the development of a state-of-the-art facility to process pulverised fuel ash (PFA) into a Supplementary Cementitious Material (SCM), which can be sold to the construction industry and used in the production of cement with a lower carbon footprint.\n \nThe new facility will be located adjacent to the Drax Power Station site, on land leased from Drax Power Limited. Under the agreement PML will construct, own and operate the new facility, whilst Drax will sell PFA to the JV as well as provide power and water to the facility, in addition to sharing the profits of the JV's sales of SCM. There is no capital investment required by Drax.\n \nThe new facility is expected to begin operations by the end of 2026, with an expected annual production of 400,000 tonnes once operating at full capacity.\n \nDrax believes the project could generate incremental Adj. EBITDA of c.£5 million pa for Drax post 2027 through to 2046.\n \nLee Dawes, Drax's Chief Operations Officer, said: \"This is a landmark deal not only for Drax, but for the UK construction industry. Cement production is one of the most carbon intensive processes in the world and through this partnership, we will be able to help the construction industry cut its carbon emissions in the years ahead.\n \n\"Drax Power Station is integral to the country's energy security and now through this new agreement it can play a further role in reducing carbon emissions in UK construction as well.\n \n\"The opportunity to sell large volumes of PFA from Drax Power Station as part of a long-term JV is another way in which we can realise incremental value from the site whilst helping to reduce carbon emissions. It is an exciting time for Drax as we continue to develop options for long-term investment in the site, including BECCS and a data centre.\"\n \nBackground details\nPFA is a byproduct of power generation at Drax Power Station and over its operating life the station has built up a reserve of PFA which can be used to meet the requirements of the new facility over th...