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UK bioethanol producers warn US trade deal threatens thousands of jobs

June 2, 2025

Two of Britain’s largest bioethanol producers have issued stark warnings that a recent UK-US trade deal could trigger site closures and significant job losses across the sector, unless the government intervenes with targeted support.

The concerns centre on the removal of a 19 per cent tariff on US ethanol imports as part of the transatlantic trade agreement, which industry leaders say is putting British manufacturers at a competitive disadvantage.

Vivergo Fuels, a Hull-based facility owned by Associated British Foods (ABF), and Ensus, a German-owned bioethanol plant in Redcar, have both said the influx of cheaper US imports could undermine domestic operations and put thousands of jobs at risk.

Ben Hackett, managing director of Vivergo Fuels, warned that the continued pressure from low bioethanol prices — now intensified by the lifting of the import tariff — could force ABF to close the Hull site, jeopardising up to 4,000 jobs locally and across the supply chain.

“We are encouraged by the engagement we have had from ministers and now need to see those warm words matched with concrete support,” Hackett said.

Vivergo, which was acquired from BP in 2015, is one of the UK’s largest producers of wheat-based bioethanol and also supplies high-protein animal feed as a by-product. The plant employs around 160 staff directly.

Ensus, which is owned by German biofuels group CropEnergies and has operated from the Wilton International site for 15 years, voiced similar concerns. It produces bioethanol from wheat and also supplies animal feed and carbon dioxide for industrial use.

Grant Pearson, chairman of Ensus UK, said the trade deal’s implications would extend well beyond energy. “The consequences will be felt across multiple sectors, including agriculture, the food and drink industry, hospital operating theatres, nuclear power generation, the development of sustainable aviation and maritime fuels — as well as undermining the UK’s potential to decarbonise its chemical industry.”

The British Chambers of Commerce has now backed industry calls for government support, warning that the removal of the tariff risks undermining one of the UK’s key green fuel sectors.

“Targeted government support is needed to safeguard this sector’s future and maintain investor confidence as we work towards our environmental and economic goals,” said Shevaun Haviland, director-general of the BCC.

Bioethanol plays a central role in reducing transport emissions in the UK. The introduction of E10 petrol in 2021 — containing up to 10 per cent bioethanol blended with regular petrol — was seen as a major step toward greener motoring. However, industry figures argue that the removal of trade protections could make UK bioethanol uncompetitive, forcing producers to scale back or shut down.

The sector also supports broader sustainability and decarbonisation targets, including the development of next-generation fuels such as sustainable aviation fuel (SAF). Industry leaders have argued that continued investment in domestic bioethanol production could serve as a springboard for the UK’s green economy — but only if government policy supports a level playing field.

So far, the government has acknowledged the concerns but has not announced any formal financial package or regulatory response. Ministers have said they are continuing to engage with the sector.

Hackett said Vivergo was prepared to invest and expand, but only if the right support mechanisms were in place. “We remain committed to our people and the region — but if the economics no longer stack up, hard choices will have to be made,” he said.

The fate of both plants is now seen as a test case for how the government balances free trade ambitions with its domestic green industry goals — and whether it can safeguard critical jobs and infrastructure in the UK’s low-carbon transition.