The London Stock Exchange listed Drax, which generates around 7 per cent of the UK's electricity, is warning that coal plants will scale back their investment in the green technology if the Government does not back down.
Biomass is made up of crops and agricultural waste such as coppice willow, elephant grass and olive residue, which is then injected into coal.
When burnt, the biomass produces no extra carbon emissions. Its proponents argue that unlike fossil fuels, biomass will release emissions when it bio-degrades anyway, and so is "carbon neutral".
In 2004, the Government decided that from this April it would cut the maximum amount of biomass-generated power that electricity suppliers can classify as "renewable", from 25 per cent to 10 per cent. All electricity suppliers must source more and more power from renewable forms of technology, rising to 10 per cent by 2010.
Because biomass generation is twice as expensive as traditional pure coal-fired generation, coal plant owners say that without the subsidy they receive as "renewable" operators, bio- mass will not be economic.
The Government said it would cut the cap to encourage generators to switch to even cleaner technologies like wind and wave power. But these have taken longer to develop than expected.
John Grogan, the MP for Selby, where Drax is located, said: "Co-firing is as green as we are going to get at the moment." He has tabled a motion calling for the Government to make an amendment to the Renewable Obligation Scheme to extend the 25 per cent cap. Some 32 MPs have signed up.
Mr Grogan also has support from the National Farmers' Union and the Renewable Energy Association.Reuse content