UK bioethanol industry faces collapse as government refuses support

ASSOCIATED BRITISH FOODS (ABF) has shut down Vivergo Fuels, the UK’s largest bioethanol plant, following the THE UK government’s “short-sighted” decision not to support the domestic bioethanol industry.

ABF and Ensus, the owner of the other major UK bioethanol plant, had pleaded for government support following the controversial decision to remove a 19% tariff on US ethanol imports of up to 1.4bn L – equivalent to the UK’s entire demand.

However, the government said it will not offer support to the industry because the decision “would not provide value to the taxpayer” or solve its long-term issues.

Vivergo processes around 1m t/y of wheat to produce up to 420m L of bioethanol, used in E10 petrol. It directly employs more than 160 people and supports around 4,500 jobs across its supply chain, including in farming and transportation.

No value

Tense negotiations with the industry began in June, following warnings from Vivergo and the Ensus plant in Redcar, Teesside, about imminent closures due to covert competition stemming from the US trade deal.

As of 2022, the US was the world’s largest bioethanol producer, generating around 67bn L annually. The UK’s removal of its bioethanol import tariff formed part of a broader trade deal with the US, aimed at reducing the 25% duty on UK-derivative goods – successfully lowered to 10%.

A government spokesperson said: “Direct funding would not provide value for the UK taxpayer or solve the long-term problems of the bioethanol industry.

“This government will always take decisions in the national interest.”

They added: “We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process.”

The bioethanol industry has faced financial difficulties for more than a decade, largely due to persistently low prices. In April, ABF warned it might shut down Vivergo, with CEO George Weston saying: “If the government wants to subsidise imported bioethanol, then we can't compete against that.”

Government backlash

Critics have condemned the government decision as “short-sighted”, with Jamie Burrows, chair of the Combinable Crops Board for the National Farmers Union, warning of far-reaching consequences. He said: “Not only is it terrible news for those hundreds of workers who will lose their jobs but also for the thousands of people whose livelihoods depend on that supply chain.”

Charlotte Brumpton-Childs, national officer for the GMB union, said: “A clean energy industrial strategy means nothing if we cannot protect plants long enough to deliver clean energy jobs here in the UK.”

The general secretary of the Unite union, Sharon Graham, said: “This is a short-sighted decision that totally disregards the benefits the domestic bioethanol sector will bring to jobs and energy security.”

ABF says Vivergo will cease all production of bioethanol and animal feed by 31 August.