by Angus Young
Arable farmers in Holderness who supply a bioethanol plant on their doorstep are facing an uncertain future after being told it could shut within days.
Saltend-based Vivergo Fuels, the UK’s largest producer of bioethanol, says it cannot compete with subsidised US imports following the scrapping of a 19 per cent tariff on ethanol under the new US-UK trade deal. Vivergo has now told wheat suppliers it will only honour existing contractual commitments with no further planned purchases unless the government provides new support.
The £350 million complex, which employs around 150 people, uses wheat to manufacture bioethanol fuel and high-protein animal feed. Since opening in 2012, it has purchased wheat from over 12,000 farms across the UK, primarily in Yorkshire and Lincolnshire. Around 4,000 people are currently employed in the supply chain.
In a statement, the company said: “We chose our location just outside of Hull in East Yorkshire so we could be in the heart of the UK’s wheat belt and we are committed to using locally-grown feed wheat wherever possible.
“At our full potential we can process over a million tonnes of wheat per year, providing an important domestic market for the wheat farming community. Unfortunately, if there is no government intervention in the next few weeks, our plant will have to close.
“That is because the government has made a series of decisions that undercut UK ethanol production in favour of US imports. The most recent trade deal was the final blow.”
Managing director Ben Hackett added: “This is not a position we ever wanted to be in. This plant supports skilled jobs, a major regional supply chain and provides a critical domestic market for farmers growing non-food grade wheat.
“We have asked the Government to increase domestic demand for bioethanol through a simple change in regulation, and for the short-term and affordable support we need until that demand materialises. So far, nothing has been forthcoming. The removal of tariffs on ethanol, combined with continuing regulatory obstacles, has left us unable to compete on a level playing field.”
Arable farmer John Holtby, who runs Dowthorpe Hall Farm in Skirlaugh, farms just under 1,000 acres of land with nearly half used to grow wheat. He said: “To have a local home for our wheat feed is invaluable. Our main grain market is Vivergo. All our wheat is feed wheat and I trade it all myself.”
The Saltend site was originally designed to handle 1.1 million tonnes of feed wheat annually but latest data for February this year shows the site produced its lowest monthly amount of ethanol since 2021 ahead of the introduction of E10 as a fuel on garage forecourts. It had previously been mothballed for four years following a slump in demand and regulatory delays surrounding the launch of E10.
Helen Plant, senior analyst for cereals and oilseeds at the Agriculture and Horticulture Development Board, said: “Neither UK bioethanol plant is expected to be running at full capacity, largely due to competitively priced ethanol imports, particularly from the US, and squeezed margins.”
Beverley and Holderness MP Graham Stuart said: “Plants like Vivergo are a cornerstone of our local economy and a huge part of the UK’s energy mix. I will be working closely with Vivergo to show the Government how important it is not just to the region but to the whole country.”
A government spokesman said: “We signed a deal with the US in the national interest to secure thousands of jobs across key sectors. We are now working closely with the industry to understand the impacts of the UK-US trade deal, on the UK’s two bioethanol companies and are open to discussion over potential options for support.”
Meanwhile, a petition has been launched to save local jobs. The petition, started by Vivergo, says: “Bioethanol has a critical role to play in decarbonising transport, now and in the future. As part of the UK’s standard E10 petrol blend, it reduces carbon emissions and cuts fossil fuel use. Its production also delivers two essential by-products: high-protein animal feed and carbon dioxide.
“CO₂ is indispensable across the economy – from its importance to the NHS for its operating theatres to cooling nuclear reactors. For the food and drink sector, it is used for everything from preserving packaged food to carbonating drinks.”
It warns that the US-UK deal allows up to 1.4 billion litres of ethanol imports – the size of the entire UK ethanol market – and that without support, UK plants will close, impacting 7,000 jobs and forcing UK cereal farmers to seek lower-value overseas buyers while increasing the country’s dependence on imports.
The petition had gained nearly 2,200 signatures at the time of writing. To sign it, visit:
you.38degrees.org.uk/petitions/save-the-uk-bioethanol-industry-1