UK biodiesel plant to close, operator announces

BIODIESEL manufacturer Greenergy has announced plans to cease production at its Immingham plant in Lincolnshire and begin redundancy consultations with its 60 staff following a strategic review.

Greenergy’s Immingham plant, in operation since 2007, produces over 100,000 t/y of biodiesel from used cooking oil, amounting to over 25% of the UK’s total supply of the renewable fuel. Biodiesel, typically blended with fossil diesel, accounted for 39% of the UK’s renewable transport fuel in 2023 – making it the largest single renewable fuel, just ahead of bioethanol at 38%, which is blended into petrol.

Greenergy operates multiple plants in the UK, including a larger facility in Teesside. The company blamed the decision to close the Immingham plant on “continuing market pressures”, most notably competition from US hydrotreated vegetable oil (HVO) suppliers, which since 2022 have had tariff-free access to the UK market but not to the EU.

The UK Trade Remedies Authority opened an investigation into US HVO imports last year, following complaints from UK biodiesel producers.

Greenergy CEO Adam Traeger said: “It has been an incredibly difficult decision to enter consultation on the proposed closure of our Immingham site, and a decision we have not taken lightly. However, in light of continuing market pressures, we unfortunately do not have enough certainty on the outlook for UK biofuels policy to make the substantial investments required to create a competitive operation at Immingham.”

The company also blamed “slower increases” in the UK’s biofuel blending mandates compared to European neighbours. Currently, the UK’s Renewable Transport Fuel Obligation (RTFO) says that 12.15% of all transport fuel should be renewable, increasing to 14.6% in 2032. Equivalent EU targets are structured differently, where the Renewable Energy Directive says that by 2030, either 29% of all transport energy should be renewable, or transport emissions intensity should reduce by 14.5%. Included in these targets is a specific goal that 5.5% of transport fuel is renewable hydrogen and advanced biofuels.

Traeger added: “We are seeking urgent talks with ministers about increasing the amount of biofuels used in the UK’s petrol and diesel, a move which will help protect the biofuels sector, as well as cutting the UK’s emissions, particularly from HGVs.

“Today’s decision does not reflect the dedication and hard work of affected staff and I would like to thank our employees at Immingham for their tremendous efforts to date. Our priority is supporting our employees through this difficult period.”

Greenergy’s frustration with renewable fuel obligations mirrors calls from the bioethanol industry for the government to increase the blend of ethanol in standard grade petrol from 10% to 15%. Leading these calls is Hull-based Vivergo Fuels which is facing closure and has formally started redundancy consultations with its 160 staff.

The UK Department for Transport says the RTFO supplied 3.7bn L of fuel in 2023, which it calculates saved 8m t CO2e.  

A government spokesperson said: “We recognise this is a concerning time for workers and their families, and we’re engaging with the company to understand the challenges and how we can address their concerns.”

Loans and dividends

Greenergy Group has been owned by Singaporean commodities trading giant Trafigura since it acquired the biodiesel manufacturer from Canadian investment fund Brookfield in 2024 for an undisclosed figure.  

Although Greenergy was profitable in 2022, the group’s latest accounts show it was running at a loss of £14.3m (US$19.3m) in 2023. This is despite a slight increase in the group’s gross profit margin from 1.8% to 2.1% in the same period.

Greenergy’s increased expenses were largely down to interest paid on loans, amounting to £454.6m from borrowings of £377.3m. Greenergy also paid £251.3m in cash dividends during the year to return equity to shareholders who had originally invested in the acquisition of a Canadian retail business, which has since been sold. Greenergy told TCE the business “maintains an appropriate capital structure and mix of debt and equity” and highlighted that “the Immingham site had been unprofitable for a sustained period, contributing to the decision to initiate a strategic review”.