UK bioethanol producer Vivergo is to shut its 416mn litres/yr plant in Saltend, northern England, after the government declined to offer financial support in the wake of a US-UK trade deal that removed tariffs on imported ethanol.
The trade deal, agreed in May, introduced a duty-free quota for up to 1.4bn l/yr of US ethanol — roughly equal to total UK demand — and eliminated a 19pc import tariff. Both Vivergo and Germany's CropEnergies, which owns the 400mn l/yr Ensus bioethanol plant in Wilton, northeast England, had warned the move would make domestic production commercially unviable.
Vivergo's owner, ABF Sugar, confirmed the Saltend plant will close, following months of talks with the government. The company said it has lost nearly £10mn ($13.6mn) since the trade deal took effect. Its primary request was for the government to increase domestic ethanol demand above the 1.4bn l/yr US quota.
The government said it had reviewed the sector's challenges but decided not to intervene.
"We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade, and have taken the difficult decision not to offer direct funding, as it would not provide value for the taxpayer or solve the long-term problems the industry faces," a government spokesperson told Argus.
Ensus chairman Grant Pearson said he met with business minister Sarah Jones today to get the government's response to its request for financial support and policy changes.
"The minister confirmed that they value both our contribution to the UK economy, the jobs we provide and support in the northeast of England, and in particular our production of biogenic CO2 which is a product of critical national importance," Pearson said.
The government is "looking at options to secure an ongoing supply of CO2 from the Ensus facility," he added, but said it may take time to finalise.
"Urgent discussions will be taking place to provide a level of assurance to the Sudzucker and CropEnergies Boards that there is a very high level of confidence that an acceptable long-term arrangement can be reached."
Ensus captures 250,000 t/yr of CO2 at the site.
