As concerns mount over the future of the UK’s biofuels sector, the operator of a significant bioethanol plant in Redcar, Ensus, has issued a stark warning: the facility is poised for imminent closure unless immediate government intervention occurs. The root cause of this crisis is a recent tariff agreement between the UK and the US that has eliminated a 19% tariff on imported US ethanol. Grant Pearson, the chairman of Ensus, indicated that this deal has “fundamentally undermined” the plant’s business viability, threatening the livelihoods of over 100 direct employees and around 3,000 others within the supporting supply chain in northern England.
Adding to the concerns, Associated British Foods (ABF), which operates the only other UK bioethanol plant, has echoed the sentiment of imminent distress, labeling the deal a “final blow” to their Vivergo Fuels site at Saltend, near Hull. Both plants are critical in producing bioethanol, which is blended with petrol to create more environmentally friendly fuel options, such as E10 fuel.
Ensus operates at a capacity of approximately 400 million liters (88 million gallons) of bioethanol per year, utilizing feed grain sourced from local farms, and also produces high-protein animal feed as a byproduct. However, with the influx of cheaper US-sourced bioethanol likely to flood the UK market, both Ensus and ABF are left vulnerable to severe undercutting.
Mr. Pearson warned that closing the Redcar plant would not just impact those directly employed but could lead to catastrophic repercussions across various sectors of the economy that rely on the biofuels industry. The UK already ranks as the second-largest importer of US ethanol, underscoring the potential scale of market disruption.
Geoff Cooper, head of the US ethanol lobby group Renewable Fuels Association, has expressed enthusiasm for the expanded market access that such deals provide, framing it as beneficial for both US farmers and UK consumers. Meanwhile, US Commerce Secretary Howard Lutnick has indicated that the agreement could soon be put into action.
The situation remains perilous for the UK’s biofuels landscape, prompting calls for swift government response to preserve jobs and sustain this vital industry.
