UK’s largest bioethanol plant to close after US commerce deal

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Friday 15 August 2025 4:47 pm

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Vivergo Fuels/PA Wire

The UK’s largest bioethanol plant is to close, its proprietor has mentioned, after the federal government determined not provide the struggling manufacturing unit an emergency funding settlement after months of fraught negotiations.

Vivergo Fuels had been locked in talks over its future with the enterprise division since June, after it warned a component of the UK-US commerce deal had left its operations financially unviable.

But in an announcement on Friday, the ABF-owned agency mentioned its Hull plant wouldn’t be capable to proceed operations after the federal government confirmed it will not “support a businesses that would be profitable under a sensible regulatory environment”.

The plant’s prime brass held the Starmer administration’s resolution to abolish a 19 per cent tariff on bioethanol imports from America chargeable for its closure, saying it had opened the UK market as much as cheaper gas produced at higher portions within the US.

US commerce deal

As a part of the commerce pact agreed with the US in June – Starmer and enterprise secretary Jonathan Reynolds allowed the US higher entry to the UK’s agricultural sector in change for bringing down tariffs that Trump had utilized on automotive, metal and aluminium exports.

Tariffs on US beef had been introduced down alongside the discount in commerce duties on bioethanol, a gas which derives from wheat and different cereals produced by arable farmers.

ABF Sugar, the bioethanol arm of London-listed conglomerate ABF, instantly warned that the phrases of the deal had left its Vivergo plant unsustainable, and shortly after entered emergency talks with the federal government over its future.

The authorities’s resolution to not prop the group up with emergency funding comes after it missed a number of deadlines set by Vivergo for negotiations, as the 2 events tried to achieve a settlement.

But the Department for Business confirmed on Friday it will not launch any emergency loans or grants for the plant.

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A spokesman mentioned: “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.”

City AM understands that the plant had not been worthwhile since 2011, and that the federal government commissioned a report from an unbiased guide, which judged saving the plant wouldn’t be an efficient use of taxpayer cash.

But the choice is more likely to result in dozens of job losses. It is known that a few of the plant’s 160 employees can be handed jobs elsewhere at ABF, however the closure will imply others are let go.

Vivergo warned it is going to even have ramifications for the “thousands whose livelihoods depend on [its] supply chain”. Bioethanol acts as a flooring to the wheat market, and its waste product is usually used as cattle feed.

“We have been fighting for months to keep this plant open. We initiated and led talks with government in good faith,” a spokesman for the agency mentioned.

“We presented a clear plan to restore Vivergo to profitability within two years under policy levers already aligned with the Government’s own green industrial strategy.”

He added: “In making this decision, the government has thrown away billions in potential growth in the Humber and a sovereign capability in clean fuels that had the chance to lead the world.

“Hugely significant investment was lined up to go into the area, from ABF and other companies. Jobs in clean energy will now move overseas – principally to the US but also to other countries with a more sensible regulatory environment.”

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One month on, the wheels are already coming off the federal government’s industrial technique

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