Norway’s NOK10.5tn (€1bn) sovereign wealth fund is welcoming UK energy company Drax Group back onto its list of potential investments after banning it in 2016 because of its coal power activities.

Norges Bank Investment Management (NBIM), which runs the Government Pension Fund Global (GPFG), said: “Since then, the company has undergone significant restructuring, with a transition from coal to biomass as fuel.”

Drax Group was excluded in 2016 after an assessment of the product-based coal criterion in the fund’s investment mandate, NBIM said in a statement.

At that time, the manager said, more than 30% of the UK company’s total power capacity had been estimated to come from coal.

The activities of the Drax Group, which started its business in the late 1960s as the Drax Power Station built to use the coal of the newly-discovered Selby coalfield, now include the production of wood pellets to generate renewable electricity.

The company says on its website it aims to become carbon negative by 2030, meaning it will be removing more carbon dioxide from the atmosphere than it produces.

NBIM said the executive board of Norges Bank, the central bank, made the decision to overturn the exclusion based on a recommendation from NBIM, which is its subsidiary.

Since 1 January 2015, exclusions from the country’s former petroleum fund are the decision of Norges Bank’s executive board, rather than the responsibility of the Ministry of Finance.

Decisions are based on recommendations from the GPFG’s Council on Ethics, which is appointed by the Ministry of Finance. However for the product-based coal criterion, decisions are formed on NBIM’s recommendations, a spokeswoman for the manager said.

“Our estimates now indicate that the company’s coal power capacity is less than 30% of the total power capacity by a good margin, and thus that the company bases less than 30% of its operations on coal,” NBIM said.

At the end of 2014, the fund had $51m (€46m) invested in the shares of Drax Group, a holding that had been worth more than $100m the year before.

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