Britains Largest Biofuel Producer Faces Closure Following US Trade Agreement Impact

The future of Britain’s premier bioethanol facility hangs in the balance as Associated British Foods (ABF) signals potential closure of its Hull-based Vivergo plant by September, threatening 160 jobs amid fallout from the recent UK-US trade agreement.

The food manufacturing giant has initiated formal discussions with the government whilst simultaneously beginning staff consultations for an “orderly wind-down” of operations. The company’s decision follows mounting pressure from a trade deal that eliminates the existing 19% tariff on US ethanol imports through a 1.4 billion-litre quota—equivalent to the UK’s entire current ethanol market.

The Vivergo facility, which produces bioethanol from locally sourced wheat, ceased grain purchases on 11 June. The plant’s potential closure represents a significant blow to the UK’s renewable fuel sector, with Vivergo and Teesside-based Ensus accounting for nearly all domestic bioethanol production capacity.

Despite Downing Street’s assertions that the industry’s challenges predate the US accord, ABF maintains that the trade deal’s concessions have exacerbated an already precarious situation. The agreement, orchestrated by Keir Starmer in May, notably includes provisions to reduce tariffs on British automotive exports to 10%.

ABF’s spokesperson emphasised their commitment to “intensive and transparent” engagement with officials to identify a viable solution. The company has indicated that without substantial government intervention—including short-term funding for losses and a long-term strategic plan—the Hull facility will cease operations by 13 September.

The government’s response characterises ABF’s announcement as “disappointing,” particularly given ongoing negotiations regarding financial support. Ministers have pledged to continue addressing the sector’s “longstanding challenges” whilst working to safeguard supply chains and employment.