US trade deal begins as UK biofuels site faces closure

The UK-US deal has come into force today (30 June) with tariffs slashed both ways for beef and ethanol.

The deal will remove a previous 19% tariff on US bioethanol imports, allowing the US tariff-free access for 1.4bn litres of ethanol each year.

The UK biofuels sector has warned the consequences could be devastating, with domestic plants, supplied by UK cereal farmers, being forced to shut as they struggle to compete with subsidised imports.

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Shadow farming minister Robbie Moore wrote on social media platform X that the removal of tariffs would be “catastrophic for UK farmers”, who are likely to lose a reliable market for feed wheat.

He added: “Higher animal feed prices are likely to follow, as the by-product used for feed will not be available.”

Associated British Foods, which operates the Vivergo Fuels bioethanol plant near Hull, East Yorkshire, has warned government that it cannot continue to absorb losses at the plant.

The site, which is capable of processing more than 1m tonnes of wheat annually, appears destined for closure unless government support is provided.

An ABF spokesperson said the firm had already entered into a consultation process with its employees, ahead of possible redundancies. 

They said: “Our employees are our most important consideration, and we will engage with them properly and transparently about the future.

“Consultation is not a fixed outcome – and closure is not a certainty.

“The outcome depends on the progress we are able to make through negotiations with the government.

“Our goal is for that outcome to be positive.”

Formal negotiations between industry and the government are ongoing to try and secure a future for the site.

The spokesperson added: “We believe it is a very positive signal that government recognises the strategic importance of a domestic bioethanol industry, and is serious about working with the sector to find a sustainable long-term future.

“We look forward to engaging intensively and constructively with ministers over the coming weeks.”

Beef

A tariff-free quota of 13,000t has also been made available for US beef imports, though hormone-treated beef will not be allowed as part of the deal.

The UK will also have reciprocal market access for beef exports to the US, which processors say will help some top-end cuts targeting niche restaurant markets.