For generations, the little town of Gloster, Mississippi, was a quiet slice of America’s Deep South, tucked deep in the pine forests, farmland and rural homesteads.

Founded in 1884, its early economy revolved around timber and the railway, but when the sawmills closed, the trains stopped, jobs dried up and families moved away.

So when Drax, the operator of Britain’s biggest power station, opened a plant here in 2016 to make wood pellets that would be burnt for “green” energy in the UK, locals hoped for a revival of their town.

Instead, some residents say, Drax has taken the best of what they had left: their peace, clean air and health.

“Drax says it’s making green energy … Well, who’s paying for that?” asked Carmella Causey, 63. “We are. We’re paying for it with our lives, the lives of our family members, the lives of our neighbours.”

Causey has congestive heart failure and chronic obstructive pulmonary disease (COPD). She wears an oxygen cannula under her nose to help her breathe.

She is far from alone. A Sunday Times investigation has discovered how residents in this poor, largely black community allege that the plant run by Drax — which claims as much as £1 billion a year from the British taxpayer for producing green energy — has left them or their families sick.

A 63-page lawsuit has been filed in the US district court for the Southern District of Mississippi, in which residents living near the plant accuse the company of turning their community into a “sacrifice zone”.

The lawsuit from residents claims: “What Drax calls ‘renewable energy’ is, for us, unliveable.” It adds: “The company’s profits come at the expense of our health, our homes and our dignity.”

Drax says it “robustly denies” that its plant is harming residents and takes these concerns “very seriously”. It says it is focused on reducing dust and engaging with residents transparently.

The company has also had ten lawsuits filed against it by current and former workers for serious health problems that they allege came from exposure to wood dust. Six have been settled out of court and four will be heard next year.

These come on top of a series of environmental concerns and scandals surrounding Drax which was once hailed as the future of “green” biomass energy and plays a crucial part in the UK’s drive to net-zero carbon emissions.

It is now facing separate lawsuits from investors who claim they have been misled about the business. Calls have grown for the resignation of Will Gardiner, the chief executive.

By day, the Drax plant in Gloster bustles with logging trucks pulling in and trucks loaded with the wooden pellets it produces leaving on their 4,000-mile journey to the firm’s power station in North Yorkshire.

The plant dominates the town. A white cloud pours from a smokestack — which stands out especially at night — and a layer of wood dust settles on cars. A smell hangs in the air — fresh pine sometimes, but cloying and nauseating at its worst. Dust cakes homes. Drax denies all this happens and has installed a dust control screen.

There is a constant industrial hum, a steady “clack-clack” from machinery, and dazzling floodlights.

Sheila Mae Dobbins, 62, lives about a quarter of a mile from the mill. Her husband Neal died in 2017, aged 62, shortly after she endured a health crisis of her own in which she “died” three times, was revived by medics and spent two months on life support.

She has COPD and is reliant on supplemental oxygen, five medicines and three inhalers to get her through each day. “Since Drax came, we been dropping like flies,” said Dobbins, who is one of 12 residents who spoke to The Sunday Times and claim their health has been affected by the Drax plant.

“My husband was on oxygen. My sister was on oxygen. I lost six neighbours on oxygen … My son, he’s dealing with respiratory problems. My son has a nosebleed, it comes and goes, and it’s so hard. It’s hard living day to day,” she laments, sitting outside her ramshackle trailer home.

“We can’t breathe. It’s very dusty … You got a foul odour. You come outside, your eyes are always runny, your nose always burning.” She is among many residents who have signed up to the class action lawsuit against Drax.

“People wanna say, ‘Y’all in it for the money.’ I’m not in it for the money. I’d rather have my health than anything. I would love to get out of here and interact with my grandson and participate with my family.”

In Gloster — a predominantly black community with 897 residents, of whom at least 32 per cent live below the poverty line — environmental concerns have grown. New research by the Land and Climate Review has uncovered 6,000 violations of US environmental laws at Drax’s pellet mills between 2019 and 2024, on top of more than 11,000 it had already revealed last year.

The firm has been fined a total of more than $6.1 million (£4.6 million) by US regulators since 2019 for environmental breaches including excess discharges of toxic air pollutants, failure to monitor or test emissions regularly, and contamination of waterways.

The Mississippi Department of Environmental Quality (MDEQ) fined Drax $110,000 (£83,600) in 2019 after the company underestimated the Gloster plant’s emissions of toxic compounds into the atmosphere. The following year, it issued a further $2.5 million (£1.9 million) penalty, followed by another fine in 2024 over its emissions.

The complaints in Gloster are a far cry from the green energy revolution that Drax was supposed to herald in the UK, where it runs Britain’s largest power station.

It was in 2013 that its power station near Selby made the move from burning coal to wood pellets — known as biomass. The idea was that using wood could actually reduce the country’s carbon footprint. Drax would burn only waste from trees that were being chopped down anyway for the construction and furniture industries, or by farmers thinning out unhealthy trees. And it would source wood only from “sustainable” forests where the felled trees would be replaced with new planting. Once the trees had regrown, the amount of carbon emitted by burning them would have been “sequestered” through photosynthesis back into the new vegetation.

Drax also pledged to develop sophisticated equipment that would capture the CO2 from the smoke and bury it deep under the seabed, a process known as bioenergy with carbon capture and storage (Beccs).

The coalition government championed the project and a generous subsidy scheme was developed to incentivise Drax.

But the promise of green energy has slowly fallen apart. For starters, Beccs has not lived up to its potential and politicians are no longer willing to back it.

And Drax’s plant is so large that it needs to burn the equivalent of about 27 million trees a year. That means it has to go far and wide to find its supplies, which is how it ended up cutting down forests thousands of miles away in the southern US and Canada to create wood pellets, creating an extra environmental footprint.

To make the pellets, wood is turned into chips which are dried by super-heated air. They are then shredded into fibre before being pressed into shiny grey pellets an inch or so long.

These are transported across the Atlantic on diesel-powered ships to UK ports — primarily Immingham, near Grimsby on the east coast. Last year alone there were 164 deliveries. From there, they are sent by train — around 75 arrive every week at the power station — and kept in temperature and climate-controlled domes 65 metres high to prevent explosions.

On November 5 Drax signed a new contract with the UK government allowing it to continue shipping US wood pellets worth millions of pounds across the Atlantic as long as they are sustainably sourced and verified.

Under rules from the United Nations Intergovernmental Panel on Climate Change, the CO2 resulting from burning biomass is not counted in Britain’s greenhouse gas emissions, even though the Drax plant is the nation’s biggest emitter giving off 11.5 million tonnes in 2023.

It has become an enormous loophole. According to UN data, coal-fired power plants emit about 1,000kg of carbon dioxide for every megawatt-hour of electricity. Drax emits about 890kg burning the pellets in the plant, plus 93.7kg from its ships and other parts of the pellet supply chain.

That makes for a total per megawatt-hour of 981kg — almost identical to coal — but under the UN’s rules, only the 93.7kg from the pellet supply gets counted.

The biomass process is so expensive that Drax could not survive financially without green energy subsidies in the form of guaranteed prices for the electricity it produces -— these have been running at up to £1 billion a year.

Meanwhile, there are longstanding concerns over whether its “sustainably sourced” wood meets its renewables obligation. In Canada, Drax was accused of using wood from precious forest land in a BBC Panorama investigation in 2022.

The company has denied this. But a whistleblower called Rowaa Ahmar, who joined Drax from the civil service shortly before the Panorama show aired, claimed in an industrial tribunal its rebuttals were a “cover-up”.

Drax no longer sources wood from such precious sites, but publicly available documents from Canadian forestry records in British Columbia show it still buys logs from woodland classified “old” (between 140 and 250 years old) or “mature” (between 81 and 249 years old).

Drax argued that this complies with the Canadian forestry rules, and that it meets the definitions of sustainability. However, the firm continues to face accusations that it has not provided correct information about its sustainability to Ofgem, the energy regulator, or MPs.

Ofgem has found that the company did not have adequate controls and monitoring in Canada, so Drax agreed to make a £25 million payment to the industry’s charity fund.

A spokesman for Drax said: “Allegations concerning Drax’s biomass sourcing were dealt with exhaustively through independent investigations and by the regulator, that found no evidence Drax’s biomass is not sustainable or that Drax has been incorrectly issued with Renewable Obligation Certificates.”

This is not the end of the firm’s woes. Now the Financial Conduct Authority (FCA), which has quasi-criminal powers of prosecution, has announced a wider investigation examining all of Drax’s financial statements on its biomass sourcing.

In the company, agitation is rising. Some executives, particularly in the US, have privately predicted that Gardiner will quit the top job and move back to his native America. Gardiner, 61, a New Yorker with an academic air who spent much of his career as an investment banker, took the helm in 2018, and in 2022 earned £5.4 million after a long-term bonus plan paid out.

He last year became executive chairman of Elimini, a Drax company in the US set up to develop carbon capture projects.

Drax said it would co-operate with the FCA, as it has with other inquiries.

It claims its pellet plant in Gloster is a good neighbour and gave The Sunday Times the phone numbers of the mayor and local businesspeople who were supportive of the company. Some of them said the sick residents were simply trying to chase compensation payments, with one saying obesity was a more likely cause of their illness.

Ed Miliband, the energy and net-zero secretary, is known to be sceptical about the logic of the operation. But because Drax produces about 5 per cent of Britain’s electricity, it is needed simply to keep the lights on.

• Dominic Lawson: A drubbing for Drax, but the trees still burn

However, in 2027, Drax’s first period of subsidies will expire. Miliband agreed last month to extend the payments to 2031, but in a begrudging extension to the plant’s life, Michael Shanks, the energy minister, said the new deal would halve Drax’s production levels and cut its subsidies accordingly.

For the sick residents of Gloster, an end to Drax can’t come soon enough. Families worry about their children being outside and respiratory problems are prevalent. Drax says that it will participate in any independent, peer-reviewed health study, and that health outcomes are determined by many factors.

“We used to hunt the land over there. Deer, squirrel, rabbit,” says George Blackmon, 48, standing outside his trailer home, holding his two-month-old baby, Zara. “I didn’t even know there was gonna be no mill. Drax just came … We got nothing in return but dust and noise.”

“I can see my baby breathing it in. Drax ain’t no ‘good neighbour’ like they promised. They’ve been bad neighbours,” Blackmon said.

Christie Harvey, 53, lives less than half a mile from the mill with her three grandchildren aged eight, seven and six. She had cancer diagnosed in 2019 and has been in remission since January.

She and two of her grandchildren have asthma; they use nebulisers and she uses a breathing machine to keep her airways open at night.

Last year Drax gave out free turkeys at Thanksgiving. “Oh wow, a turkey, they must care,” she added, with sarcasm. “But it feels like they’re slowly killing us. To the people in England I’d say: ‘You want clean energy? Well, I want clean air. Tell Drax I want my grandkids to grow up. I just want them to be healthy’.”