Government blamed as UK’s largest bioethanol plant stops production

The UK’s biggest bioethanol producer has stopped production at its £350m East Yorkshire plant, blaming Government “inaction” in making oil companies use 10% bioethanol in petrol.

Vivergo Fuels said it had invested heavily in its Hull plant in the expectation that new rules forcing oil companies to increase the percentage of bioethanol in petrol would be introduced, for which Vivergo has introduced a fuel called E10.

However, the company said losses had risen due to government delays.

Vivergo said: “We reluctantly welcomed the Government’s Renewable Transport Fuel obligation proposals in September, but have remained extremely concerned that there is no roll-out framework for E10 in the UK, the absence of which could have serious consequences for the long-term future of the UK bioethanol industry.

“Over the past six weeks we have seen bioethanol prices fall significantly impacting Vivergo profit margins further.  Whilst there have been some supply increases this year, the bioethanol market in the UK remains constrained by the Government’s inaction. As a result of these market conditions and legislative uncertainty, we have taken the decision to take our production facility offline for the foreseeable future.”

It employs more than 150 people at the production site in Hull and head office in Hessle, as well as supporting over 3,000 jobs directly and indirectly. Vivergo said that while the plant is offline, it is taking the opportunity to bring forward and extend its annual plant maintenance work in order to “maintain employment levels”.

“We will closely monitor the market ahead of any plant re-starting,” Vivergo said.

“In the meantime, we will continue to work with all stakeholders and the Government to support the legislative process and the future roll-out of E10; the simplest, most readily available environmentally friendly option for consumers to help reduce the impact of road transport on our environment and providing stability and confidence in the future of the UK bioethanol industry and the jobs it supports.”

Vivergo Fuels’ plant in East Yorkshire is the UK’s largest, and Europe’s second largest producer of bioethanol, a low-carbon renewable transport fuel which is blended with petrol.

The plant can produce up to 420 million litres of bioethanol and the bioethanol is made from 1.1 million tonnes of feed wheat, sourced from nearly 900 farms across the East Yorkshire region. It is also the country’s largest single production site for animal feed, delivering 500,000 tonnes of high protein feed to over 800 farms across the UK.