(Bloomberg) -- A major shareholder in Drax Group Plc is pushing the UK utility to drop some licenses to harvest trees for biomass in Canada.

Drax, whose biomass sustainability was scrutinized in a documentary last year, was asked by Schroder Investment Management Ltd. to transfer or dispose of its existing so-called Category Two licenses within the next 12 months, according to a public letter by Schroders to the chairs of the UK Parliament’s Environmental Audit Committee. 

The licenses allow access to plots of land in British Columbia and are issued by BC Timber Sales, a government agency that manages about 20% of the province’s allowable annual cut for public timber.

The pressure is a sign of heightened investor concerns around companies’ environmental impact and the use of biomass in power production just as European Union policymakers debate what types of fuel can contribute to renewable energy goals. Questions were raised over sustainability when the BBC claimed to film trees logged in ecologically-important “primary” forests covered by Drax’s license.

Drax has extensively rebutted the BBC’s allegations, saying the area was not primary forest and that it only sources sustainable biomass from timber offcuts to burn in its Yorkshire power station. It aims to source biomass that delivers positive outcomes for the climate, nature and local communities, a Drax spokesperson said in an emailed statement.

“Category Two Licences form a very small part of Drax’s sourcing portfolio,” the spokesperson said, without saying if it would drop them. “We currently hold two Category Two Licences in British Columbia and will not be bidding for any more.”

Schroders declined to comment. 

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Drax is seeking approval to the UK government’s Track-1 carbon-capture program this week, while it’s also being attracted by a generous subsidies in the US to build biomass-fired power plants that include carbon capture, or BECCS.

Schroders, which said in the March 10 letter that it held 6.8% of Drax’s shares, added that it is supportive of the generator’s plan for BECCS. 

“We consider biomass producers to play an important role in supporting energy security for the UK as it transitions towards net zero carbon emissions,” the investment firm said in its letter.

(Updates to add Schroders declined to comment in seventh paragraph.)

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