UK bioethanol firms ‘under threat’ from US trade deal

The UK biofuels industry has warned that domestic bioethanol production could be at risk if tariffs are removed on imports as part of the US-UK trade deal.

Vivergo and Ensus, the two largest bioethanol facilities in the UK, which represent the vast majority of the UK processing capacity, have released a joint statement raising major concerns.

The statement, jointly authored by Ensus chairman Grant Pearson and Paul Kenward, chief executive of Vivergo’s parent company, ABF Sugar, stated that the deal had triggered an existential threat.

See also: Good for beef, less so for arable – UK-US trade deal verdict

It said: “The US-UK trade deal is set to remove tariffs on US ethanol and replace it with a zero-tariff quota of 1.4bn litres, which coincidentally is the size of the UK’s whole ethanol market today, far exceeding previous US exports to the UK.

“This change comes on top of regulations that give overseas producers an unfair advantage in the British market.

“The operating environment is now impossible.”

The two plants combined buy more than 2m tonnes of wheat each year for bioethanol production, with animal feed being left as a byproduct.

Vivergo and Ensus have warned that if the sites are forced to close, hundreds of growers would lose a significant market for feed wheat, which could put more pressure on prices and exports.

The statement added: “Without urgent government action, the UK’s bioethanol industry will simply vanish, leaving the country dependent on imported ethanol – while also losing significant domestic production of carbon dioxide and high-protein animal feed.”

Vivergo site at risk

Associated British Foods’ (ABF) interim financial accounts for the 24 weeks ending 1 March 2025 showed that its sugar division had made an operating loss of £16m during the period.

The accounts said: “Persistent low European sugar prices and an operating loss in our UK bioethanol business, Vivergo, are impacting overall profitability in 2025.”

ABF said the way bioethanol regulations were being applied had been undermining the commercial viability of Vivergo.

Discussions between ABF and the government are ongoing to try to find a solution to regulatory issues.

The report said: “There is no guarantee that these discussions will be successful, and we will either mothball or close the Vivergo plant if necessary.”