LONDON — The U.K. government has ruled out stepping in to save two of the country’s key bioethanol producers, Vivergo Fuels and Ensus, from closure — after signing a trade deal allowing U.S. ethanol to flood the British market.
The government decided not to provide direct financial support, leaving 160 workers at Vivergo’s Saltend-based plant facing redundancy, with layoffs set to begin on Monday. Ensus’ plant in Redcar is also at risk of closure.
In a statement, a government spokesperson said: “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.”
Vivergo’s future was thrown into doubt after the U.K.-U.S. trade deal, announced in May, opened the door to 1.4 billion liters of tariff-free American ethanol — almost equivalent to the size of the entire domestic market.
The decision has wider implications for other industries and investment into Britain. Vivergo had been lined up to supply feedstock for a £1.25 billion sustainable aviation fuel facility backed by Meld Energy — a project now on hold. Over 12,000 U.K. wheat farmers supply Vivergo’s plant, which also produces high-protein animal feed.
Meanwhile, Ensus, one of the U.K.’s only other bioethanol producers, supplies around 30 percent of the country’s commercial carbon dioxide — needed for soft drinks and medical use.
“We recognize this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process,” said the government spokesperson. “We also continue to work up proposals that ensure the resilience of our CO2 supply in the long-term in consultation with the sector.”
The decision will also prove unpopular with voters in Hull, with the Saltend chemical park just a 10-minute drive away.
Reform UK’s Luke Campbell, who recently swept into office as Hull an East Yorkshire mayor with nearly 50,000 votes, told POLITICO: “Labour’s decision not to provide support, and not to change the clause in their U.S.-U.K. Trade deal is incredibly disappointing. It means job losses and closures for hard working people.”
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