The UK’s largest bioethanol production facility, Vivergo Fuels, located in Saltend near Hull, is facing a severe threat of closure unless the government provides immediate assistance. The operator of the plant, Associated British Foods (ABF), revealed that production levels have been slashed due to plummeting bioethanol prices. This precarious situation has been exacerbated by a recent trade deal between the UK and the US which has eliminated a 19% tariff on US ethanol imports, an action described by Vivergo as the “final blow” to its operations.
In an appeal for government intervention, Vivergo’s Managing Director Ben Hackett communicated directly with farmers, stating that without urgent action, the facility, which employs more than 160 people, would become unviable. Hackett lamented that UK ethanol production has been systematically undermined in favor of US imports and emphasized that if the current trajectory continues, the company would be unable to purchase more wheat, which is crucial for its operations.
The government has released statements indicating that it is actively engaging with the bioethanol industry to understand the implications of the recent trade deal. While a spokesperson indicated that discussions regarding potential support options are ongoing, the urgency conveyed by Vivergo suggests that time is running short. Hackett noted that if the government could provide policy certainty in the long term, along with immediate relief, Vivergo could continue its operations and even expand production.
Since the announcement of the trade deal, which has undoubtedly shifted the competitive landscape for bioethanol production in the UK, ABF has been involved in discussions with the Business Secretary Jonathan Reynolds. These discussions have highlighted the pressing need for “urgent next steps” to safeguard the domestic bioethanol industry, especially in light of the fact that hundreds of jobs could be at stake if further action is not taken rapidly.
On a broader scale, the plant’s production of bioethanol is significant as it is blended with petrol, specifically in E10 petrol, a fuel mix introduced in 2021 aimed at reducing carbon emissions by including up to 10% bioethanol. Additionally, by-products from the bioethanol production process include animal feed, further integrating Vivergo into the agricultural supply chain.
As the situation develops, both the government and the industry leaders are in a race against time. Hackett’s comments indicate a willingness to work with the government, but express frustration at the lack of firm commitments so far. The impending closure of Vivergo could have a cascading effect on the bioethanol industry in the UK, consolidating the market in favor of US imports at the expense of local producers and employment.
In responding to the crisis, a spokesperson for the government defended the trade deal, asserting that it was made in the national interest, aimed at securing jobs across multiple sectors. However, the apparent disconnect between this assertion and the immediate needs of the bioethanol sector raises concerns about the short-sightedness of policy decisions that favor short-term economic agreements over the sustainable development of local industries.
Both ABF and the government must navigate this critical juncture effectively. The future of Vivergo Fuels not only hinges on governmental support but also represents a larger debate about the balance between trade agreements and the protection of domestic industries. As this unfolding situation demonstrates, the need for urgent governmental response is paramount to maintain the viability of bioethanol production in the UK and protect the jobs dependent on it.
In conclusion, the Vivergo Fuels case illustrates the challenges faced by the biofuels sector in the context of international trade agreements and domestic policy choices. Whether the government can act swiftly to avert the closure of such an essential facility remains to be seen, but the stakes are undeniably high for workers, farmers, and the environment alike.