Potential job losses for around 4,000 people as ABF contemplates closure of bioethanol production facility.
The future of Britain's largest bioethanol plant, Vivergo Fuels in Yorkshire, is hanging by a thread as the plant's owner warns it could shut down within days due to the UK-US tariff policy.
ABF, the plant's owner, has alerted farmers that they will suspend wheat purchases for the production process, urging the government for immediate intervention. If no action is taken, over 160 skilled workers and an estimated 4,000 livelihoods could be affected.
The plant has the capacity to manufacture up to 420 million litres of bioethanol from over 1 million tonnes of feed-grade wheat, primarily sourced from farms across Yorkshire and Lincolnshire.
ABF accuses the UK-US trade deal, which removed a 19% tariff on ethanol imports, of providing an "unbeatable cost advantage" to the heavily subsidized US ethanol, risking the competitiveness of British producers.
On May 14, leaders of the UK's two largest bioethanol plants met with Business and Trade Secretary, Jonathan Reynolds. Reynolds promised action in "days not weeks", but the firms claim there has been little evidence of urgency from the government since.
Ben Hackett, the Managing Director of Vivergo Fuels, stated, "We have asked government to increase domestic demand for bioethanol through a simple change to regulation, and for the short-term and affordable support we need until that demand materializes. So far, nothing has been forthcoming."
If the plant closes, it could worsen the loss reported by ABF’s sugar division of £122m for the six months to March, down from a profit of £121m the previous year. Representatives from the Department for Business have been contacted for comment.
In related news, the US ethanol imports are now welcomed without tariffs, while over 800 million liters of bioethanol produced annually by the two major UK plants could face struggles competing with US imports, which dominate the global market. Industry experts warn of "catastrophic" consequences for the sector if no support measures are taken.
- ABF, frustrated by the increased competition from US ethanol in the markets, suggests a change in regulations to bolster domestic demand for bioethanol in Britain.
- In the sports arena of the bioethanol industry, the closure of Vivergo Fuels could lead to a significant loss of over 4,000 livelihoods, placing British producers at a disadvantage against US ethanol imports.
