{"id":69662,"date":"2025-08-15T20:34:12","date_gmt":"2025-08-15T20:34:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/69662\/"},"modified":"2025-08-15T20:34:12","modified_gmt":"2025-08-15T20:34:12","slug":"economic-self-harm-leads-to-closure-of-uks-biggest-bioethanol-plant","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/69662\/","title":{"rendered":"\u2018Economic self-harm\u2019 leads to closure of UK\u2019s biggest bioethanol plant"},"content":{"rendered":"

Britain\u2019s biggest bioethanol plant is shutting down with the loss of 160 jobs after the UK-US trade deal opened up the market to cheaper imports from America.<\/p>\n

Vivergo Fuels, which is owned by Associated British Foods, said it had no choice but to close its site on the Saltend Chemicals Park near Hull after the government took the \u201cdeeply regrettable\u201d decision \u201cnot to support a key national asset\u201d. It had been seeking taxpayer support for the plant, which has been losing \u00a33 million a month.<\/p>\n

Ben Hackett, the managing director of Vivergo Fuels, said: \u201cThe government\u2019s failure to back Vivergo has forced us to cease operations and move to closure immediately. This is a flagrant act of economic self-harm that will have far-reaching consequences. This is a massive blow to Hull and the Humber.\u201d<\/p>\n

\"Man<\/p>\n

The fate of a second bioethanol factory, Ensus UK, which operates at the Wilton International site near Redcar and is owned by Germany\u2019s CropEnergies, is also hanging in the balance. However, it remains in talks with the government over whether the plant, which employs about 100 workers, can continue as the UK\u2019s maker of CO\u2082 \u2014 a byproduct of bioethanol production that is used in everything from fizzy drinks to NHS operating theatres.<\/p>\n

Both companies have been warning of the risk of closure since Sir Keir Starmer\u2019s trade deal with President Trump in May cut to zero the UK\u2019s 19 per cent tariff on up to 1.4 billion litres of US bioethanol imports a year. That is roughly equivalent to the UK\u2019s entire annual consumption.<\/p>\n

On the insistence of the US president, who is keen to preserve American farming jobs, the prime minister agreed to a last-minute concession, blindsiding the two companies<\/a> that make up Britain\u2019s bioethanol industry. They produce green fuel from non-food grade wheat that is used in E10 petrol \u2014 which is fossil-fuel petrol containing up to 10 per cent renewable ethanol, to lower its emissions. The companies also make animal feed.<\/p>\n

\u2022 Alistair Osborne: Unexpected extras in US trade deal<\/a><\/p>\n

The trade deal prompted months of negotiations over a potential bailout but Jonathan Reynolds, the business secretary, has now decided that he cannot justify propping up the sector with taxpayer subsidies. The news was broken to the companies in a meeting with Sarah Jones, the minister for industry. <\/p>\n

In a statement, the government said that it always took decisions in the national interest: \u201cThat\u2019s why we negotiated a landmark deal with the US which protected hundreds of thousands of jobs in sectors like auto and aerospace.\u201d<\/p>\n

It said it had \u201cworked closely\u201d with the two companies since June \u201cto understand the financial challenges they have faced over the past decade, and have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces\u201d.<\/p>\n

Paul Kenward, chief executive of ABF Sugar, has long said, even before the trade deal, that the sector\u2019s difficulties have been caused by government regulation that favoured US exporters.<\/p>\n

\"Workers<\/p>\n

ABF said the effects would be felt beyond those directly losing their jobs<\/p>\n

IED ROBINSON\/ONEREDEYE<\/p>\n

A spokesman for ABF said: \u201cWe presented a clear plan to restore Vivergo to profitability within two years under policy levers already aligned with the government\u2019s own green industrial strategy. The government has thrown away billions in potential growth in the Humber and a sovereign capability in clean fuels that had the chance to lead the world. Jobs in clean energy will now move overseas.\u201d<\/p>\n

\u2022 Tariffs blamed as Britain\u2019s exports to US drop to lowest since 2022<\/a><\/p>\n

ABF, which has invested more than \u00a3700 million in Vivergo over the past decade, added: \u201cThis plant should always have been profitable under the right regulatory environment, as similar plants in western Europe demonstrate.\u201d<\/p>\n

The company, which said that its supply chain supports \u201c4,000 livelihoods\u201d, was also \u201chugely disappointed\u201d that \u201cthe press was informed of this decision before we were told \u2014 and before we had a chance to communicate to our staff\u201d.<\/p>\n

Supporters of the government\u2019s decision pointed out that ABF, which also owns the retailer Primark, is controlled by the billionaire Weston family, who could have put in more funds.<\/p>\n

\"Industrial<\/p>\n

The Ensus UK plant may be able to continue<\/p>\n

The government offered a possible reprieve to Ensus, which is ahead of Vivergo when it comes to CO\u2082<\/a> production, saying: \u201cWe also continue to work up proposals that ensure the resilience of our CO\u2082 supply in the long term, in consultation with the sector.\u201d<\/p>\n

Grant Pearson, chairman of Ensus UK, said that at the meeting with Jones, she confirmed that the government values \u201cour production of biogenic CO\u2082 which is a product of critical national importance. They are therefore looking at options to secure an ongoing supply of CO\u2082 from the Ensus facility.\u201d He said, however, that it will \u201ctake time\u201d to agree \u201can acceptable long-term arrangement\u201d.<\/p>\n

\"Paul<\/p>\n

Paul Kenward<\/p>\n

SWNS\/THE TIMES<\/p>\n

Green industrial revolution opportunities will now go overseas<\/p>\n

The closure of Vivergo Fuels in Hull is more than the loss of a plant (Paul Kenward writes). It is a warning about how Britain risks closing itself off from the future fuels revolution, and how, in the process, UK PLC risks squandering a real opportunity to create high-quality green industrial jobs.<\/p>\n

For Hull, bioethanol should have been the start of a green industrial revolution: a hub for low-carbon fuels serving UK transport, shipping and aviation, with skilled employment, investment in infrastructure and growth for the region\u2019s farmers and suppliers. Instead, that future will now happen overseas \u2014 in countries with which Britain competes for increasingly scarce investment and growth.<\/p>\n

I am, of course, deeply saddened for our 160 colleagues who are losing their jobs, and for the thousands more across the supply chain \u2014 from the farmers at the 12,500 farms supplying our wheat to the hauliers, engineers and contractors whose livelihoods depend on the plant. They will no doubt be deeply frustrated, as I am, at the ministerial inaction that has led us to this point.<\/p>\n

\u2022 Sharon Graham: Path to green energy should not be littered with job losses<\/a><\/p>\n

Over the past decade ABF has invested more than \u00a3700 million in Vivergo, sustaining it through extended losses caused by policy distortions unique to the UK. Under competitive and stable market conditions, bioethanol could and should be a hugely profitable sector. All we needed from the government, since the shock of the trade deal that gave away the entire market to subsidised US competitors, was time-limited support to bridge the period until regulatory changes, already in line with the government\u2019s stated direction, were in place.<\/p>\n

For several years a UK-only regulatory loophole gave foreign producers an artificial price advantage in our own market. No other country applies such a rule to its domestic producers. Then, in May, the surprise removal of the 19 per cent tariff on US ethanol imports as part of the trade deal, done with no notice and no transition plan, made it impossible for UK plants to compete in their own market. If Vivergo had been in Rotterdam, where these distortions do not exist, it would be successful.<\/p>\n

The result of the refusal to support Vivergo is a message to investors that the UK is willing to cede sovereign fuel capabilities to overseas competitors, even in sectors directly aligned with its growth and net-zero priorities. The cost of doing business in UK regulated sectors is becoming too high, not because the industries lack potential but because unpredictable policy shifts and regulatory inconsistency make it too risky to commit long-term capital.<\/p>\n

This is about more than one plant. Future fuels, from sustainable aviation fuel to advanced biofuels, are a huge global growth opportunity. Other countries are locking in their share. In the US, a clear policy framework has driven record bioethanol output and exports, underpinned rural economies and attracted billions in private investment. Across the EU bioethanol production is growing.<\/p>\n

\u2022 Taxpayer will subsidise industry energy bills to help firms compete<\/a><\/p>\n

The UK could have been part of this story. Saltend Chemicals Park, where Vivergo is based, has the potential to generate \u00a324.2 billion in GVA (gross value added) by 2050, rising to \u00a350 billion with planned investments. That included a signed memorandum of understanding with Meld Energy for a \u00a31.25 billion sustainable aviation fuel facility, projected to add \u00a37.3 billion to the economy over its lifetime. But with Vivergo gone, the domestic ethanol supply this project depended on will no longer exist. That means the investment may now go abroad, along with the jobs, skills and growth it would have brought to the UK.<\/p>\n

The government had a clear window to safeguard a strategic industry and chose not to take it. Failing to act now sends the wrong message: that Britain is content to become an import-only market for the very fuels and technologies it will depend on to hit net zero. It signals to investors that they must factor in the risk that future policy changes or trade deals could abruptly undermine entire sectors \u2014 making every emerging clean energy industry, from sustainable aviation fuel<\/a> to hydrogen, a more uncertain and risky investment.<\/p>\n

Vivergo\u2019s closure should not close the conversation, but unless the government acts now, the UK\u2019s green industrial future will be built abroad. The investment, jobs and skills that could have been anchored in places like Hull will instead flow to countries with clearer, more consistent regulatory regimes. Britain will end up importing fuels and technologies it could have produced at home, paying a premium for the privilege, and watching the economic opportunity of a generation slip through its fingers.<\/p>\n

Paul Kenward is the chief executive of ABF Sugar, parent company of Vivergo Fuels<\/p>\n","protected":false},"excerpt":{"rendered":"Britain\u2019s biggest bioethanol plant is shutting down with the loss of 160 jobs after the UK-US trade deal…\n","protected":false},"author":2,"featured_media":69663,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-69662","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/69662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=69662"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/69662\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/69663"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=69662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=69662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=69662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}