Operators of two of the largest UK bioethanol plants have warned that the trade deal last week with the US puts thousands of jobs in danger.
Paul Kenward, CEO of ABF Sugar (which owns Vivergo), and Grant Pearson of Ensus said that Prime Minister Kier Starmer demonstrated real leadership by securing a UK-US Trade Deal, providing tariff relief to the steel and car industries.
This “vital sovereignty capability” for bioethanol production in the United States will disappear if immediate action is not taken.
Vivergo, Ensus and other companies operate nearly all of the bioethanol production facilities in the UK. Ensus operates a plant at Wilton, on Teesside. Vivergo refines fuels in Saltend, near Hull.
Bioethanol is produced from biological waste or crops specifically grown for this purpose. It can be used as a substitute or additive for petrol.
The US-UK deal will remove tariffs from American ethanol, and replace them with a zero-tariff quote of 1.4 billions litres. This is “coincidentally”, according to the firms, the same size as the UK’s entire ethanol market. This amount is far more than previous US exports.
Kenward and Pearson stated in a press release: “This is a change on top of the regulations that give foreign producers an unfair edge in the British Market. “The operating environment has become impossible.”
The sector said that the government’s delays in mandating the switch to E10 from E5 petrol forced it to reduce production in the years leading up to the final change in 2021. Since September last year, decisions made on fuel certificates, imports and tariffs have placed this success in serious danger.
The British added: “The problem is not the unviable facilities, but the way British officials apply the rules and regulations which undermine their competitiveness.
Together with our supply-chain partners, we are supporting thousands of jobs in the North East, and Yorkshire. These are green, good jobs in industries that ministers have said they want to expand.
The trade agreement, they said, is causing the bioethanol industry to face imminent collapse. In their letter, they said that “in our current situation we will be forced to close these factories”.
Bioethanol is a key component in the decarbonisation of transport. It is the fuel for UK’s standard E10 blend of petrol, reducing emissions. Two essential by-products are also produced: carbon dioxide which can be used in many sectors, including food packaging, drinks, healthcare and animal feed.
Tom Bradshaw of the National Farmers’ Union said that the inclusion of significant volumes of bioethanol into the deal raised concerns for British arable growers.
The biofuel sector is very important. Their domestic demand can reach up to 2,000,000 tonnes, which can help balance the supply and demand. They also produce as much as 1,000,000 tons of animal feed.
If we open up the ethanol market, our farmers could lose this lucrative outlet.
Bradshaw said, “We’re analyzing what this means to the viability of domestic bioethanol production as well as the impact it could have on our members.”
Kenward and Pearson stated: “Without urgent action from the government, the UK’s Bioethanol industry will disappear, leaving it dependent on imported fuel and losing domestic production of high-protein animal food.”
A spokesperson for the government said: “This deal was signed in the national interest of the government to secure thousands jobs in key sectors, from the steel industry to the auto industry. It also laid the foundations for future trade.
“We will be meeting with leaders in all sectors to discuss the impact of this deal, including ethanol producers.”
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