Greenergy biodiesel plant faces shutdown amid challenges in UK biofuels market

One of the last remaining biodiesel plants in the United Kingdom is at risk of closure due to the ongoing pressure of subsidised imports from the United States. Greenergy, which operates out of Immingham Docks in Lincolnshire and is owned by commodities trader Trafigura, announced it has temporarily ceased operations at the site while undergoing a strategic review. The plant, which employs around 60 staff and produces approximately 25 per cent of the nation’s biodiesel, is struggling to remain competitive in the face of these imports.

The Immingham facility is critical to domestic biodiesel production, relying on waste-based feedstocks like used cooking oils. Biodiesel is a renewable alternative that forms about 7 per cent of the diesel used by drivers across the country, playing a vital role in reducing carbon emissions in transport. Despite significant cost-cutting measures, Greenergy stated that challenging market conditions have made it difficult to continue operations.

American hydrotreated vegetable oil (HVO), a rival form of biodiesel, is supported by heavy subsidies in the United States. While the European Union maintains protective tariffs against these imports, the UK removed similar measures in 2022 following Brexit. This decision has exposed domestic producers to increased competitive pressure from international counterparts, with reports indicating nearly half a million tonnes of subsidised US products entering the UK market since these protections were scrapped.

In response to these concerns, the UK’s Trade Remedies Authority launched an anti-dumping investigation in March. This probe aims to determine whether US-imported HVO is being sold at artificially low prices or benefiting unfairly from subsidies, thereby harming UK businesses. Nevertheless, industry leaders warn that the absence of immediate support could lead to lasting damage to the domestic biofuels sector.

Greenergy’s situation reflects broader issues facing renewable fuel producers across the country. Last year, another biodiesel plant in Motherwell, Scotland closed operations after citing the removal of trade defence measures as a key factor. The sector is also seeing warnings from bioethanol producers, who similarly note the negative impact of US imports following tariff eliminations within a trade agreement between the two nations.

Industry lobbyists, including the Renewable Transport Fuel Association, have urged the government to take swift action to preserve the UK’s renewable fuel capacity. According to the group’s chief executive, Gaynor Hartnell, governmental oversight has played a role in the current challenges, with avoidable missteps exacerbating the pressure on domestic producers. Immediate intervention is seen as crucial in preventing full reliance on foreign imports for renewable fuels.

A government spokesperson acknowledged the difficulties faced by the sector, noting that officials are working closely with stakeholders to address concerns. While discussions remain ongoing, time appears to be running out for key players battling to keep Britain’s biofuel industry alive in the face of global competition.