UK bioethanol industry under threat from US trade deal

Britain’s bioethanol industry faces an uncertain future following a recent trade agreement with the United States. Domestic producers warn the deal could jeopardise the long-term viability of the sector, putting hundreds of jobs at risk. Ensus UK and Vivergo Fuels, two of the country’s leading bioethanol manufacturers, are urging the government to reconsider its decision to allow tariff-free ethanol imports from the US. These lower-cost exports may leave British producers struggling to compete.

The arrangement permits up to 1.4 billion litres of ethanol to enter the UK market tariff-free, removing the previous 20 per cent duty. For US ethanol exporters, this opens a lucrative opportunity, but for UK manufacturers, the outlook appears bleak. High energy costs and strict regulatory measures already weigh heavily on domestic producers, with this new challenge further threatening profitability and sustainability.

Vivergo Fuels, owned by Associated British Foods and based near Hull, employs 150 staff and has the capacity to produce 420 million litres of bioethanol annually, alongside 400,000 tonnes of animal feed. A spokesperson from ABF expressed concern over the government’s decision, describing the tariff changes as a significant blow to local employees, suppliers, and farmers. The company is in discussions with officials to analyse the potential impact of the deal.

Ensus UK, operating from its Redcar plant and owned by CropEnergies, processes over one million tonnes of British wheat each year to create bioethanol, high-protein animal feed, and carbon dioxide. The company employs 100 people directly, with its supply chain supporting thousands more. In a statement, a representative noted that the agreement puts a major question mark over the future of British bioethanol production and called for urgent engagement with the government to address the issue.

US ethanol companies, on the other hand, have praised the trade deal. Geoff Cooper, CEO of the Renewable Fuels Association in the States, thanked the American administration for securing access to one of the most significant global markets for ethanol, valued at $700 million annually. Last year, US exporters shipped 244 million gallons of ethanol to the UK, making it their second-largest market after Canada.

British bioethanol producers feel the impact already. Vivergo experienced operating losses recently, and ABF has warned that without regulatory reform, the plant could face closure or mothballing. The rise of cheap imports follows similar trends seen earlier this year, when Ineos shut down its Grangemouth ethanol facility in Scotland after citing competitive pressures. While government representatives have promised continued engagement with affected companies, the challenges ahead signify a critical moment for the UK bioethanol industry.