The government has been given a two-week deadline by ABF Sugar, the owner of the UK’s largest bioethanol plant, to come up with a rescue plan for the industry. This ultimatum comes after a trade agreement with the US threatened to flood the British market with 1.4bn litres of tariff-free ethanol. Unless a package to save the industry is presented within the given timeframe, the plant’s 160 workers may face redundancy, impacting a further 5,000 jobs in downstream supply chains.
Political pressure from both Labour MPs and Nigel Farage’s Reform UK party is mounting on the government to intervene and save the plant. ABF Sugar’s chief executive, Paul Kenward, stated that investors are no longer willing to support the plant’s losses, especially after the US-UK trade pact announcement.
The UK government has admitted to being blindsided by the decision to offer a tariff-free quota to US producers, equivalent to the entire annual demand in the UK. Talks have been ongoing between the industry and the government regarding support and regulatory changes, but no agreement has been reached yet.
The Vivergo plant, struggling since the E10 mandate was introduced in 2021, blames its lack of profitability on the current regulatory environment in the UK bioethanol market. Changes in regulations in 2022 favored ethanol produced from waste products over crops, leading to an influx of US corn-based ethanol imports.
The future of the plant remains uncertain, with Vivergo’s managing director, Ben Hackett, expressing concern that government actions are pushing them towards closure. The industry is seeking regulatory changes and short-term funding to survive in a market flooded with subsidized US ethanol imports. The government’s approach to decarbonisation is akin to deindustrialisation, according to industry experts. Frustration has been mounting over the government’s inaction to support the UK industry, including plants like Ensus in Wilton on Teesside. Industry leaders are calling for measures such as transitioning to E15 petrol blend, revising regulations to prevent unfair competition, and providing short-term subsidies to sustain the industry until growth-enhancing initiatives take effect.
MPs have acknowledged the competitive challenges posed by the US trade deal and are collaborating with the transport department to implement regulatory changes. However, pressure is mounting from local MPs and industry groups reliant on byproducts from these plants, such as high protein animal feed and carbon dioxide gas.
The British Chambers of Commerce and the Renewable Transport Fuel Association are advocating for clarity on government support for the sector, particularly in light of the impact of the US trade deal. The shift towards hybrid cars in the UK is increasing demand for petrol, making bioethanol a crucial component in the transition to fully electric vehicles.
Local leaders, including Reform Mayor Luke Campbell and Labour MP Karl Turner, have been vocal about the detrimental effects of the US trade deal on British industry and jobs. Workers at the affected plants are anxious about the future of their jobs and are urging the government to intervene to prevent job losses in the thousands.
Paul Snuggs, an operations technician, expressed dismay at the government’s lack of support, emphasizing the broader impact on the supply chain beyond just the 160 jobs at the site. Similarly, systems control engineer Andy Gardner raised concerns about the government potentially sacrificing British jobs in the pursuit of saving others through the US-UK trade deal.