A north-east refinery shut down after bioethanol prices plunged has announced plans to cut up to 22 of 98 jobs.
Ensus UK has started consultation with employees at its plant at Wilton, Teesside, claiming staff reductions could help the long-term health of the business.
The refinery, which was an important buyer of wheat for the region, was closed in February, after bioethanol prices slumped to an all-time low.
See also: Teesside bioethanol plant shuts down
Owner CropEnergies set aside a one-off cost of up to £29m to cover the temporary shutdown, while waiting for markets to improve.
Ensus UK commercial director Grant Pearson said the UK and other EU governments should push on quickly with the renewable energy directive (RED), which said 10% of energy from transport fuels should come from renewables by 2020.
UK law, set out in the renewable transport fuel obligation (RTFO) order, targets a level of 4.75% by volume or 3.5% by energy.
“The decarbonisation of the transport sector is one of the UK government’s key commitments under the climate change act,” Mr Pearson said.
The Ensus plant used more than 1m tonnes of feed wheat each year, providing an extra market for arable growers.
It also produced high protein livestock feed feed as a co-product.
NFU North East crops board chairman Brett Askew said the government needed to get the RTFO “back on track” towards meeting the 10% target.
“Looking forward, regulators must look at what is deliverable when considering their options to decarbonise the transport sector up to 2030 and beyond,” he said.
“The NFU will work proactively in this area and it is clear in my mind that crop-based biofuels must play a significant part in the debate, as one of very few scalable and sustainable alternatives at present.”