A US plant that supplies wood pellets to the UK power generator Drax has violated air pollution limits in Mississippi, it has emerged. The Mississippi Department of Environmental Quality (MDEQ) has written to Amite BioEnergy notifying the Drax-owned company that it had violated emissions rules. The notice of violation, which has been seen by the Guardian, said that while the plant was permitted to “operate as a minor source for hazardous air pollutants”, a review of Amite’s monitoring reports had shown the factory had been a “major” source of hazardous air pollutants from January 2021 until late last year. The plant in Gloster, Mississippi, converts trees sourced from southern states into wooden pellets, which are burnt as biomass fuel in Drax’s huge power station in Selby, North Yorkshire. The sustainability of Drax’s operations has increasingly come under scrutiny from MPs and environmental campaigners. In 2021, Amite was fined $2.5m (£2m) after breaching air pollution rules. It is unclear whether the latest breach will lead to a financial penalty. The notice of violation, issued in March, said the company was permitted to emit 24 tons (22 tonnes) a year of hazardous air pollutants on a rolling 12-month basis, but reached as much as 37 tons between January 2021 and December 2022, peaking in July 2022. The MDEQ asked Amite for an explanation and what action it had taken to correct the violation. In response, Drax argued that pellet production was a relatively young industry, adding: “Several wood pellet facilities, not only Amite BioEnergy, initially underestimated emissions in connection with the permitting of these facilities. “Amite BioEnergy has a history of acting quickly to update emissions and permits upon discovery of new emission factors and new information pertaining to other pellet production plants.” Amite argued that, according to its analysis, it was only non-compliant for a short period – between late October and early November 2021. Great Britain’s energy regulator, Ofgem, has launched an investigation, which will be carried out by the US consulting group Black & Veatch, over whether Drax’s operations are aligned with biomass sustainability rules. Last year, the UK government was accused of funding “environmental racism” in the US south by providing subsidies to Drax. The company, which has a stock market valuation of more than £2bn, received £617m in government subsidies in 2022. In the US, Matt Williams, a campaigner for Cut Carbon Not Forests and a senior advocate for the Natural Resources Defense Council, said of Drax: “It’s already been fined once. But a $2m fine is pocket change to a company that receives hundreds of millions of pounds in subsidies every year by claiming to be green. And now it’s doing it again. “Burning trees in power stations should not be part of our energy system. The UK government needs to stop handing billions of pounds in subsidies to companies like this that are poisoning people’s air, making climate change worse, and destroying forests.” John Randall, a former Conservative MP who was an environment adviser to Theresa May, said another breach by Drax was “extremely worrying”. Lord Randall added : “It’s imperative that Drax, which receives millions in bill-payer subsidies, cleans up its act immediately.” A Drax spokesperson said that in January 2022 an environmental consultant reviewed its air pollution calculations and “identified some discrepancies” before the company contacted MDEQ to “fine tune” the calculations and update the readings. The spokesperson said: “Drax took prompt corrective action in response and worked with MDEQ to resolve the issues and provide them with accurate reports and permit applications. We continue to work with leading environmental consultants to ensure that we monitor and report permit compliance in a rigorous and transparent manner. “Drax is committed to environmental compliance and remains focused on transparency and open communication with the [US] Environmental Protection Agency, MDEQ and the community. “The safety of our people and the communities in which we operate is our priority, and we take our environmental responsibilities very seriously.” The company reported annual profits of £731m in 2022, up from £398m the year before, and last month said it would hand investors £150m through a share buyback. Last week, Drax told investors it planned to expand significantly in the US.