Vivergo Fuels and Ensus, the UK's leading bioethanol producers, face closure as the government declines to provide a rescue package. A trade deal eliminating a 19% tariff on US ethanol imports allows excess supply into the UK, undermining local production viability. This situation endangers 270 direct jobs and thousands in the supply chain, affecting the country's low-carbon fuel output. Associated British Foods criticized the government's move, expressing concerns about job losses and the future of clean energy production, while officials emphasized that financial aid wouldn't solve the industry’s long-term problems and committed to assisting affected workers.
Hull-based Vivergo Fuels and Ensus in Redcar, Teesside, warned they would be forced to shut down following a US-UK trade deal that removed a 19% tariff on ethanol imports from America, allowing up to 1.4bn litres to enter tariff-free, equivalent to the UK market size. Both firms stated that the agreement makes them commercially unviable, threatening 270 direct jobs and thousands more in the wider supply chain, as well as the UK’s low-carbon fuel production capacity.
Associated British Foods, the owner of Vivergo, described the government’s decision as 'deeply regrettable' and claimed ministers are abandoning a 'key national asset.' They indicated that the loss of production could shift clean energy jobs overseas, reinforcing that the plant could have been profitable with the right regulatory environment, similar to operational plants in Western Europe.
The Ensus plant, a major producer of bioethanol from wheat, accounts for 30% of the UK's commercial carbon dioxide supply, utilized in soft drinks, healthcare, and nuclear industries. This plant also significantly supports British agriculture as a major buyer of domestic wheat.
A government spokesperson acknowledged the financial challenges faced by both companies over the past decade but concluded that direct funding would not provide value for the taxpayer or address the industry's long-term issues. They pledged to support affected workers and their families through collaborations with trade unions and local partners.
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