NORWAY'S oil fund has lifted its restriction on investing in Drax as the North Yorkshire power company ditches coal in favour of cleaner energy.

Norges Bank Investment Management which overseas the fund put Drax on its investment blacklist in 2016 when it estimated that coal accounted for more than 30 per cent of the FTSE 250 group’s total power capacity.

The fund acknowledges that Drax which supplies 12 per cent of the UK’s renewable electricity has taken steps to overhaul its business.  Drax chief executive Will Gardiner welcomed the decision as recognition of its 'pioneering transformation'.

"Converting Drax from coal to sustainable biomass has reduced emissions at Drax by over 80 per cent since 2013, making us the largest renewable power generator in the UK and the biggest decarbonisation project in Europe. Now we’re taking it a step further with our world-leading ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage technology. This would anchor a new zero carbon industrial cluster in the Humber region, protecting thousands of jobs and creating new opportunities for clean growth in the north and throughout the UK.”