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BBC Business reporter Lucy Hooker reported on Tuesday that Vivergo, one of the UK’s two bioethanol plants, has made the decision to cease production. The plant will begin laying off all of its 160 employees following the government’s announcement that it will not be offering financial support to the struggling bioethanol sector. Vivergo, which is owned by Associated British Foods, stated that continuing operations would only lead to significant financial losses, prompting the decision to close down and demolish the site by the end of the year.
The government justified its decision by stating that a rescue plan for the bioethanol industry would not be cost-effective for taxpayers nor address the sector’s underlying issues. Bioethanol, a fuel additive that helps reduce greenhouse gas emissions, can be produced from waste oil or grains and is commonly used in petrol blends like E5 and E10, as well as sustainable aviation fuel. The UK’s recent trade deal with the US eliminated tariffs on ethanol imports, creating tough competition for domestic producers like Vivergo.
Prior to the trade agreement, UK bioethanol producers had been struggling with unfair competition from US imports, which enjoyed financial advantages due to their waste byproduct certification. Vivergo’s closure, along with the looming threat faced by the other bioethanol plant in Redcar, Teesside, owned by Ensus, highlights the challenges faced by the industry. Ben Hackett, Vivergo’s managing director, expressed disappointment with the government’s decision, labeling it as a detrimental move for the local economy in Hull and the Humber region.
The closure of Vivergo not only impacts its workforce but also raises concerns about the supply chain, as suppliers and customers will be affected. With the UK potentially becoming reliant on imports for CO2 and ethanol, industry experts warn of the risks associated with such a scenario. Despite the government’s assurances of supporting the affected companies during the closure process, the lack of long-term solutions for the resilience of CO2 supply underscores the broader challenges faced by the bioethanol sector in the UK
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