The UK’s largest bioethanol plant will shut down after the government refused to provide financial support, with owners Associated British Foods blaming the closure on competitive pressures following Prime Minister Keir Starmer’s new trade deal with US President Donald Trump. The decision will result in the loss of 160 jobs at the Vivergo Fuels facility in Hull.
Impact of the trade deal
The Vivergo plant, which produces bioethanol from wheat for blending into petrol, has struggled to remain profitable amid falling prices. Industry experts say the situation worsened after the UK–US trade agreement reduced tariffs on American biofuel imports, allowing cheaper US ethanol to flood the market. Analysts argue that this has undercut domestic producers, leaving Vivergo unable to compete on cost.
Company announcement
Associated British Foods confirmed the closure, saying it had exhausted efforts to secure emergency funding from the government. The company described the decision as “deeply regrettable” but unavoidable in the face of deteriorating market conditions. Employees at the Hull site were informed this week, with union representatives warning that the job losses will hit the region hard.
Government stance
Ministers defended the refusal to provide state aid, stating that the government is prioritising fiscal discipline and cannot intervene in every case of market pressure. A spokesperson said the administration remains committed to renewable energy but must balance industrial support with international trade obligations. Critics accused the government of sacrificing domestic industry in favour of political gains abroad.
Regional consequences
The closure of Vivergo is expected to have knock-on effects for the local economy in Hull, where the plant has been a major employer and a significant buyer of British wheat. Farmers who supplied the facility warned of reduced demand and lower prices for their crops, while local officials voiced concern about the wider economic fallout in East Yorkshire.
Energy and climate concerns
The decision has also raised questions about the UK’s renewable energy strategy. Bioethanol is seen as a key transitional fuel in reducing carbon emissions from transport. Environmental groups criticised the closure as a setback for green energy production, warning that increased reliance on imports could undermine the UK’s climate goals.
Wider industry impact
The shutdown reflects broader pressures on the European biofuels sector, which has faced volatility in energy markets, competition from imports, and policy uncertainty. Analysts suggest that without stronger government support or stricter trade protections, more domestic plants could face closure, reducing Europe’s ability to produce renewable fuels at scale.
REFH – Newshub, 16 August 2025
Recent Comments