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The UK bioethanol industry is in a precarious position, facing imminent collapse as the government has opted not to provide a rescue package to support the sector. Vivergo Fuels based in Hull and the Ensus plant in Redcar on Teesside have both issued warnings about potential closure without government intervention, following a deal that allowed tariff-free import of US ethanol. Associated British Foods (ABF), the owner of Vivergo, expressed deep regret over the government’s decision not to support what they considered a crucial national asset.
The trade pact between the US and UK, established in May, removed a 19% tariff on ethanol imported from the US up to a quota of 1.4 billion liters, equivalent to the current UK market size. This agreement rendered the operations of Vivergo and Ensus economically unfeasible, prompting concerns from the companies about their future viability. Vivergo presented a profitability plan to the government, indicating potential growth in the clean energy sector that would now be lost due to the closure of the plants.
Despite the efforts made by the government to understand the financial challenges faced by the companies over the past decade, it was determined that direct funding was not a viable solution to the long-term issues plaguing the industry. The closure of the bioethanol plants, impacting 270 direct employees and potentially thousands more in the supply chain, poses a significant challenge for the affected workers and their families. The government assured that support would be provided through collaboration with trade unions, local partners, and the companies to mitigate the impact of the industry’s downturn.
Bioethanol, a renewable fuel derived from wheat, corn, or sugar beet, plays a crucial role in blending with conventional fuels like E10 petrol in the UK. Delays in the transition to higher bioethanol content in petrol by the government have contributed to the industry’s struggles. With ambitions to increase the use of sustainable sources like bioethanol in aviation fuel to 10% by 2030, the government recognizes the importance of supporting the bioethanol sector. Additionally, Ensus, a major player in the industry, produces 30% of the UK’s commercial carbon dioxide, essential for various industries such as soft drinks, medical applications, and nuclear facilities. The government has pledged to address challenges in the CO2 supply chain to ensure its resilience in the future
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