Closure of UK bioethanol plant “a huge blow”

The closure of Hull-based bioethanol plant Vivergo is expected to have an impact on local wheat growers and the broader agricultural industry, NFU said. 

The plant, which also produces animal feed for UK farms, is owned by ABF (Associated British Foods). Vivergo has purchased up to 1m tonnes of domestic wheat annually, from more than 4,000 farms – primarily in Yorkshire and Northern Lincolnshire.

ABF said: “The decision to close the plant follows extensive discussions with the Government to find a regulatory and financial solution that would enable Vivergo to operate on a profitable and sustainable basis.”

It said the plant’s commercial viability was “undermined” by the way in which UK regulations were applied to “favour foreign producers” – which was worsened by the government’s decision in May to remove tariffs on US bioethanol coming into the UK market. 

“These two actions meant Vivergo would inevitably continue to be heavily loss-making without corrective government intervention to provide short-term financial support and a longer-term regulatory solution.”

ABF revealed the government has “decided not to offer either short-term financial support or the long-term regulatory certainty we sought”.

Vivergo started laying off its 160 employees this week. 

The government said it had made the “difficult decision” not to offer direct funding as it would “not provide value for the taxpayer or solve the long-term problems the industry faces”.

Vital market lost

NFU Combinable Crops Board chair Jamie Burrows described the closure as a “huge blow”.

He added: “Not only is it terrible news for those hundreds of workers who will lose their jobs but also for the thousands of people whose livelihoods depend on that supply chain – that includes local farmers who have lost a vital market for their product.

READ MORE: How will the US trade deal affect UK farmers?
READ MORE: Govt cancels extra border checks ahead of UK-EU deal

“Bioethanol production in the UK is such an important industry. The volume of wheat entering the supply chain has been as high as 1.2m tonnes. It also plays a key role in producing a vital source of animal feed as a by-product and CO2 used by the wider food supply chain.”

He urged the government to recognise the potential economic growth and value of this market by ensuring crops grown for biofuels are used increasingly in road transport and aviation. 

“This will open up further market opportunities to incentivise growers to support the country’s biofuel plants.”

Vivergo will have ceased all production of bioethanol and animal feed by 31st August 2025.

“Difficult decision”

A Government spokesperson said: “This Government will always take decisions in the national interest. That’s why we negotiated a landmark deal with the US which protected hundreds of thousands of jobs in sectors like auto and aerospace.

“We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade, and have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces.

“We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process. We also continue to work up proposals that ensure the resilience of our CO2 supply in the long-term in consultation with the sector.”

Read more arable news.