Biofuel plant 'faces closure after US trade deal'

The UK's largest bioethanol plant will be forced to close unless the government acts, according to its operator.

In April, Associated British Foods (ABF) said it was in talks with the government to help save its Vivergo Fuels site at Saltend, near Hull, after being forced to cut production levels due to low bioethanol prices.

On Tuesday, Vivergo said the removal of a 19% tariff on US ethanol imports, which was part of the recent UK-US trade deal, was the "final blow".

A government spokesperson said it was working closely with the industry to understand the impacts of the trade deal and it was open to discussions over potential support.

In a letter to farmers, Vivergo managing director Ben Hackett said: "Unfortunately, if there is no government intervention in the next few weeks, our plant will have to close.

"That is because the government has made a series of decisions that undercut UK ethanol production in favour of US imports. The most recent trade deal was the final blow.

"If there is no government intervention, we will not be able to purchase any more wheat outside our current, limited, commercial commitments."

The firm said that without urgent action, the plant, which employs more than 160 people, would no longer be viable and its wheat purchases would end.

Mr Hackett added: "This is avertable. If the government provides sufficient policy certainty to us in the long term and ameliorates the effects of their decisions in the short term, we can continue to operate and expand production.

"But so far, they have made no commitments."

Earlier this month, Business Secretary Jonathan Reynolds met representatives of ABF and the country's other key bioethanol producer, Ensus UK, which is based in Cleveland.

The firms said the the secretary of state agreed on the need for "urgent next steps" to protect the UK's bioethanol industry and had committed to act within "days, not weeks" amid concerns that hundreds of jobs could be at risk.

Mr Hackett said: "So far, nothing has been forthcoming."

However, he added: "We still believe this situation can be turned around – but time is rapidly running out."

In response, a government spokesperson said: "We signed a deal with the US in the national interest to secure thousands of jobs across key sectors.

"We are now working closely with the industry to understand the impacts of the UK-US trade deal on the UK's two bioethanol companies and are open to discussion over potential options for support."

The Saltend plant produces bioethanol which is used in E10 petrol.

E10, which was introduced in 2021 to help cut carbon emissions, contains up to 10% bioethanol.

Vivergo also produces animal feed, which is a by-product of the bioethanol production process.