Hull, UK – The future of Vivergo Fuels, the UK’s largest bioethanol plant based in Saltend near Hull, is under threat following a government decision to repeal a 19% tariff on US bioethanol imports as part of the recent UK-US trade agreement. The move has prompted the company to consider shutting down operations, with potential widespread implications for local employment and the British wheat supply chain.
Vivergo’s Crisis Deepens as Tariff Removal Undermines Market
At Vivergo Fuels’ industrial facility near Hull, a lorry recently unloaded 20 tonnes of Lincolnshire wheat destined for conversion into ethanol, a renewable fuel blended with petrol to reduce carbon emissions. However, this delivery marks the last scheduled wheat consignment ordered by the company amid an unfolding crisis.
Vivergo Fuels, owned by food giant Associated British Foods (ABF), announced last month that it had begun consulting with staff regarding potential closure due to market uncertainty triggered by the UK government’s removal of a 19% import tariff on US bioethanol. The tariff repeal is part of the UK-US trade deal ratified in May 2024 and is seen by Vivergo as a blow to its competitiveness in the domestic market.
Ben Hackett, managing director of Vivergo, stressed the gravity of the situation: “The removal of tariffs effectively destroyed our market overnight. Customers have shifted to cheaper US imports, placing this key facility on the precipice of closure. We cannot afford to operate at such a loss.”
Employment and Supply Chains at Risk
The Saltend plant employs over 160 workers directly and purchases more than one million tonnes of British wheat annually from more than 4,000 farms across the UK. Over the past decade, Vivergo has sourced wheat from approximately 12,000 individual farms, underpinning a robust rural supply chain.
The company estimates that around 4,500 jobs throughout this network including farmers, transport operators, and other suppliers are at risk if production ceases.
Stacey Monkman, a logistics and commercial team member who has worked at Vivergo for three years, described the impact on staff morale: “We’re doing our jobs, but it’s unsettling. Facing an uncertain future while supporting families is really difficult. A lot depends on what happens next.”
Similarly, Nick Smalley, production manager overseeing 65 employees, highlighted the stress caused by external decisions: “It’s frustrating to have no influence over choices that directly affect our livelihoods. Quick action is urgently needed; we’re approaching a crisis point.”
Impact on Farmers and Transporters
Farmers supplying wheat to the plant have voiced concern over the potential loss of a reliable buyer. Matt Pickering, who farms near Gainsborough, Lincolnshire, sold the final ordered load of wheat to Vivergo. He noted, “Given our land quality, we focus on bulk volume crops, and Vivergo has been a fantastic long-term customer for feed wheat.”
Transport companies are equally anxious. Mike Green, managing director of haulage firm Aghaul Limited, which delivered the last wheat load, warned about ripple effects on the freight industry: “Losing this contract won’t just affect us—it’s going to impact a wide array of people and companies connected to bioethanol supply chains.”
Background: Bioethanol’s Role in UK Energy and Trade Policy
Bioethanol, an alcohol derived from crops like wheat, is blended with petrol to reduce greenhouse gas emissions from transport fuels. The UK government has historically supported the domestic bioethanol industry through tariffs on foreign imports and mandates for renewable fuel content, aligning with climate targets.
The Saltend plant, operational since 2013, was once hailed as a flagship of the UK’s green economy. Its production has contributed significantly to renewable fuel targets, utilising British agricultural outputs and creating local employment.
Trade negotiations with the United States led to the removal of a key 19% tariff on US bioethanol imports in May 2024. Critics argue the move has disadvantaged UK producers, exposing them to competition from often cheaper American bioethanol, which benefits from different agricultural subsidies and production costs.
The bioethanol market has also been affected by global price volatility and fluctuating demand, factors that had already pressured Vivergo ahead of tariff changes. The company reduced production earlier this year amid low prices and first raised the prospect of closure in April, before the formal trade deal was concluded.
Pide la intervención del Gobierno
Vivergo urges the UK government to provide financial support and establish a clear, long-term policy framework to revive domestic demand and secure the bioethanol sector’s future.
“We are weeks away from ABF needing to decide on the site’s viability,” Hackett warned. “Without support, this crucial part of the green economy could shut down, with devastating consequences for British farmers, transporters, and workers.”
A government spokesperson acknowledged the challenges bioethanol producers face, stating: “We are in formal discussions with Vivergo Fuels and committed to finding a way forward that protects jobs, supply chains and livelihoods. We understand the importance of this industry to the wider green economy and are engaged at pace, including with external experts, to develop a sustainable solution.”
Industry and Expert Perspectives
Energy policy analysts emphasize the broader implications of Vivergo’s predicament. Dr. Helen Matthews, senior fellow at the UK Renewable Energy Association, noted: “The bioethanol sector is a vital component of the UK’s net zero strategy. The loss of domestic production capacity risks increasing reliance on imports, potentially undermining both economic and environmental goals.”
She added that trade agreements, while important, must balance free trade with the need to nurture emerging green industries. “Without strategic protections and incentives, the UK risks hollowing out key sectors that support rural economies and decarbonisation.”
Looking Ahead: Economic and Environmental Stakes
The closure of Vivergo Fuels would not only cost jobs and disrupt rural livelihoods but also complicate the UK’s ambition to reduce carbon emissions in transport a sector responsible for nearly a third of UK greenhouse gas outputs.
Government action in the coming weeks is critical. Stakeholders are closely watching for financial measures or policy shifts that could help sustain the bioethanol industry amid evolving trade dynamics.
As the UK navigates its post-Brexit trade relationships and green transition, the fate of Vivergo Fuels may serve as a bellwether for balancing international trade, domestic industry viability, and environmental commitments.
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