UKs Largest Bioethanol Plant Days From Shutdown As Government Considers Bailout

Britain’s largest bioethanol plant stands on the brink of closure, with the owner issuing an ultimatum to ministers for urgent government intervention. Vivergo, part of Associated British Foods and based in the East Riding of Yorkshire, must secure support by 18 August or risk shutting its doors, potentially ending operations that support 160 direct jobs and impact over 12000 growers and related businesses nationwide.

The Vivergo refinery, situated at Saltend Chemicals Park near Hull, converts feed wheat into bioethanol, a crucial additive in standard fuels such as E10 petrol aimed at cutting carbon emissions. The company is currently enduring losses of £3 million each month, pressure intensified by the government’s decision to allow 14 billion litres of US ethanol imports annually without tariffs, following a White House request. A previous Ministry of Transport ruling has also favoured American producers, offering double subsidies for corn-based bioethanol and further undermining the British operator’s competitiveness.

ABF is urgently seeking short-term government support and policy commitments to stimulate domestic demand for bioethanol. In return, the company is prepared to invest in producing food-grade carbon dioxide, a byproduct essential for various industries, thereby strengthening its case for public aid. A recent government-commissioned review from crisis consultancy Teneo is believed to back some level of support for Vivergo, although Business Secretary Jonathan Reynolds remains cautious about open-ended financial commitments.

Chief executive Paul Kenward of ABF Sugar has emphasised the necessity of a decisive government response, warning that delays or indecision could lead to the imminent collapse of the facility. Kenward asserts that the proposal can deliver at least £248 billion in gross value added over 25 years if allowed to proceed, providing a significant economic boost for Hull and the wider UK industrial sector.

Industry voices are rallying behind Vivergo, viewing it as a strategic asset for domestic energy security, job creation, and innovation. There are also calls for the government to avoid repeating the fate of the Grangemouth refinery in Scotland, which was closed earlier this year despite its sizeable contribution to the nation’s GDP.

Government officials have acknowledged the seriousness of the situation and claim to be actively working with the company to secure a workable solution. The focus remains on protecting jobs, supply chains, and the economic livelihoods dependent on Vivergo’s continued operation, with time now of the essence for ministers to reach a decision.