The future of the bioethanol plant in Redcar, operated by the German company Ensus, remains uncertain as ongoing discussions with the UK government continue. Ensus has expressed concerns that a recent UK-US tariff agreement has severely harmed its business viability by eliminating a crucial 19% tariff on ethanol imports from the US. This development not only jeopardizes the Redcar plant but also follows the closure of the UK’s other bioethanol facility, Vivergo Fuels located in Saltend, Hull, which ceased operations in August and laid off its 160 employees.
Both facilities play a significant role in producing bioethanol blended with petrol, contributing to greener fuel options like E10 ethanol for the UK market. However, what sets Ensus apart is its ability to produce commercial carbon dioxide (CO2) during the ethanol manufacturing process. This CO2 is essential for various industries, including food production and healthcare, making its production a matter of “critical national importance” according to the business minister in discussions with Ensus.
The UK is currently reliant on imports for the majority of its CO2 supply, making Ensus’s operations even more crucial. The UK Department for Business and Trade (DBT) has stated that it continues to engage with Ensus to ensure a robust and resilient CO2 supply while also evaluating the potential impacts of changing demand on the industry at large.
As negotiations progress, Ensus has warned that reaching a resolution will likely take time, indicating that the plant’s fate hangs in the balance. The situation underscores broader challenges facing the bioethanol sector in the UK, raising critical questions about its future in light of shifting trade policies and the necessary support for sustaining domestic production.
