What's happened
Vivergo Fuels near Hull has announced the winding down of its bioethanol plant following the UK government's decision to end the 19% tariff on US bioethanol imports. The last wheat delivery occurred last Friday, threatening jobs, regional investment, and future green projects like sustainable aviation fuel. The government is in discussions to support the industry amid industry-wide uncertainty.
What's behind the headline?
The closure of Vivergo Fuels signals a significant shift in the UK bioethanol sector, driven by trade policy changes and regulatory constraints. The removal of the 19% tariff on US bioethanol has made it difficult for domestic producers to compete, risking the loss of a strategic industry that supports regional agriculture and green energy initiatives. The plant's winding down not only threatens jobs but also jeopardises future investments in sustainable aviation fuel projects, such as Meld Energy's plans at Saltend. The government's ongoing negotiations highlight the industry's urgent need for support to preserve supply chains and maintain the UK's green energy ambitions. This story underscores the broader challenge of balancing free trade with domestic industry protection, especially in sectors critical to climate goals and regional economies.
What the papers say
According to Politico, the last wheat delivery to Vivergo occurred last Friday, marking the end of its operations. The Independent reports that the plant's closure is linked to the UK-US trade deal, which ended the 19% tariff on American bioethanol, making it difficult for UK producers to compete. The article highlights that Vivergo's closure threatens not only jobs but also future green projects like Meld Energy's sustainable aviation fuel plans, which rely on the plant's infrastructure. Both sources emphasize the government's ongoing discussions and the urgent need for support to prevent further industry decline. The coverage from Politico and The Independent provides a detailed picture of the economic and strategic implications of this industry crisis, illustrating the complex interplay between trade policy, regional economic health, and environmental ambitions.
How we got here
Vivergo Fuels, owned by Associated British Foods, has been a key player in the UK bioethanol industry, purchasing over a million tonnes of British wheat annually from thousands of farms. The plant's viability has been challenged by regulatory changes, including the removal of tariffs on US bioethanol, which has increased competition from heavily subsidised American imports. The UK government has been engaged in ongoing discussions with industry players to address these challenges, but the situation remains uncertain.
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