U.K.'s Largest Bioethanol Plant to Shut After Government Refuses Aid

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. government has decided not to help its bioethanol sector with the result that Associated British Foods (ABF) (London) has announced the closure the country's largest bioethanol plant in Hull, England.

The Vivergo Fuels (Hull) plant employs 160 people and has a capacity of 420 million litres of bioethanol and 400,000 tonnes of animal feed. It was supplied by 12,000 U.K. wheat farmers. Industrial Info reported last month that the sector was facing collapse following a tariff deal struck by the U.K. with the U.S. that removed an existing 19% tariff on imports of U.S. ethanol. The deal allows a tax-free quota of up to 1.4 billion liters to be imported - equal to the U.K.'s annual demand for ethanol - a move that U.K. suppliers claimed would drive them out of business. For additional information, see July 8, 2025, article--U.K. Bioethanol Sector Facing Collapse.

The closure also scuppers a recent £1.25 billion (US$1.7 billion) memorandum of understanding with Meld Energy (Surrey, England) to anchor a "world-class Sustainable Aviation Fuel (SAF) facility at the site." Last June, Meld Energy received the green light to build a 100-megawatt (MW) green hydrogen plant at the Saltend Chemicals Park, which is also home to Vivergo and a number of major chemicals firms. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

A government spokesperson said: "We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade and have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces."

The country's only other key player in the sector, bioethanol supplier Ensus U.K. (Redcar), which operates in Teesside, also has warned that its future is under threat. Bioethanol from both plants is typically blended with petrol to produce more environmentally friendly fuels, such as E10 petrol in the U.K. The Teesside plant produces 400 million litres of renewable ethanol and 350,000 tonnes of high-protein animal feed. It also supplies more than 30% of the U.K.'s commercial carbon dioxide (CO2) for use in the healthcare and drinks industries. The government spokesperson commented: "We also continue to work up proposals that ensure the resilience of our CO2 supply in the long-term in consultation with the sector."

In a critical statement, ABF said: "The Government has decided not to offer either short-term financial support or the long-term regulatory certainty we sought. The decision to close the plant follows extensive discussions with the Government to find a regulatory and financial solution that would enable Vivergo to operate on a profitable and sustainable basis. Vivergo's commercial viability was undermined by the way in which U.K. regulations were being applied to favour foreign producers, an issue subsequently made much worse by the Government's decision in May to remove the tariffs on U.S. bioethanol coming into the U.K. market. These two actions meant Vivergo would inevitably continue to be heavily loss-making without corrective Government intervention to provide short-term financial support and a longer-term regulatory solution. Vivergo will have ceased all production of bioethanol and animal feed by 31 August 2025."

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