A bioethanol plant in Redcar, operated by Ensus, may be forced to close imminently unless the UK government intervenes. The operator cited a recent UK-US tariff agreement that eliminated a 19% tariff on American ethanol imports as a critical factor undermining its business viability.
Urgent Call for Action
Grant Pearson, chairman of Ensus, emphasized the urgency of the situation, highlighting the potential loss of skilled jobs in the region. โThe government needs to come up with an urgent solution to save the jobs we have,โ Pearson stated, underscoring the broader economic implications of the plantโs potential closure.
In response, a spokesperson from the Department for Business and Trade (DBT) confirmed that they are in discussions with the bioethanol industry to assess the impacts of the new trade deal. The outcomes of these conversations could be pivotal for the future of bioethanol production in the UK.
Significance of Bioethanol Production
Ensus operates one of the UKโs key bioethanol plants that produces approximately 400 million litres (88 million gallons) of bioethanol annually, primarily sourced from feed grain obtained from local and European farms. This product is blended into fuels such as E10 petrol, contributing to more environmentally friendly energy solutions.
The Redcar facility not only produces bioethanol but also generates high-protein byproducts used as animal feed, supporting the agricultural sector. Currently, the plant employs over 100 staff directly and supports an estimated 3,000 additional jobs throughout its supply chain in northern England.
Economic Ripple Effects
Industry insiders warn that the influx of American-produced bioethanol could significantly undercut local businesses like Ensus and the associated agricultural firms. Pearson articulated concerns that the loss of the Teesside plant would have โcatastrophic knock-on effects in other vital sectors of the economy.โ The ramifications could extend beyond immediate job losses, impacting economic stability in the region as a whole.
Growing US Influence in the UK Market
The UK is the second-largest destination for US ethanol exports, as noted by the Renewable Fuels Association, an American ethanol advocacy group. Their head, Geoff Cooper, expressed optimism about the new market access, highlighting it as a boon for the US farm economy while providing lower-cost, cleaner fuel options for UK consumers. Meanwhile, US Commerce Secretary Howard Lutnick indicated excitement about the swift implementation of the agreement, noting that it would come into effect โin the coming days.โ
The future of the Ensus plant and the UK bioethanol industry hangs in the balance as stakeholders await government action to address the challenges posed by the newly established trade dynamics. The situation highlights broader issues at the intersection of international trade, local industry sustainability, and job security in the evolving energy sector.
For more business News, checkย PGN Business Insider.
