Hundreds of jobs to be axed as £350m bioethanol plant announces closure

Hundreds of jobs are to be cut after a major bioethanol plant has announced it is to stop production.

Vivergo Fuels, based in Hull, is to cease production and more than 100 jobs will be axed when the plant closes later this month.

Mark Chesworth, Managing Director at Vivergo Fuels, said: “I am extremely disappointed at having to make this difficult choice to plan to cease production as of the 30 September 2018 at the Vivergo Fuels plant. We have created a highly skilled and world-class business that had the opportunity to be part of a British sustainable biofuels industry. But sadly, the Government’s lack of pace over the past decade to introduce E10 has further undermined our ability to operate.  My employees are my number one concern at this time and we have entered into consultation with them.

“I would like to take this opportunity to thank our workforce, past and present partners, growers and customers for their support since the creation of our plant in 2007.”

E10 is a biofuel which is being gradually rolled out across the country in a bid to reduce carbon emissions.

The plant is located in the heart of the UK’s wheat-growing belt, employing more than 150 skilled people at its production site in Hull and Head Office in Hessle. The plant buys 1.1 million tonnes of feed wheat sourced from nearly 900 farms across the Yorkshire region; supporting over 3,000 jobs directly and indirectly, which currently contributes around £600m to the UK economy.

Dr Mark Carr, group chief executive of AB Sugar, added: “It is with a heavy heart that I announce the proposed cessation of production at the Vivergo Fuels plant. In 2007, we had an ambition to create a British biofuels industry in the North of England. We are making this difficult choice as a result of continued trading conditions; characterised by a low bioethanol price, high wheat price and a slow growing market hindered by a lack of pace by the government to introduce E10.

“On the 30 September 2018, pending employee consultation this world-class facility will stop production and as a consequence, it is regrettable there is anticipated to be a significant reduction in the workforce”.

The plant is the UK’s biggest bioethanol producer and only re-opened in April after halting production last November, blaming Government “inaction” in making oil companies use 10% bioethanol in petrol. The decision by Vivergo Fuels to re-open in April came following a change in the law to increase the amount of biofuels in petrol passed through Parliament.

Last year, 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.