Vivergo and the UK – US trade deal

The UK must not trade away its strategically vital bioethanol industry

By Paul Kenward, Chief Executive, ABF Sugar, and Grant Pearson, Chairman, Ensus

The Prime Minister showed real leadership in securing the UK-US trade deal, delivering relief for Britain’s car and steel industries. But for another strategically essential sector, domestic bioethanol production, it is now clear that the deal has triggered an existential threat. 

Without immediate action, this vital sovereign capability will be lost.

Between us, we operate the two largest bioethanol facilities in the country: Ensus in Wilton on Teesside, and Vivergo in Saltend, near Hull, representing nearly all of the UK’s bioethanol production capacity. 

The facts are these. The US-UK trade deal is set to remove tariffs on US ethanol and replace it with a zero-tariff quota of 1.4 billion litres, which coincidentally is the size of the UK’s whole ethanol market today, far exceeding previous US exports to the UK. This change comes on top of regulations that give overseas producers an unfair advantage in the British market. The operating environment is now impossible.

Bioethanol plants are profitable across Europe and in the US – and have been in the UK too. Government delays in mandating the switch from E5 to E10 petrol forced the sector to scale back production in the years before the change finally took effect in 2021. Since last September, decisions on imports, tariffs and fuel certificates have put that success at very significant risk. 

It’s not the facilities that are unviable, the problem is how British officials apply rules and regulations that undermine their competitiveness. 

Together with our supply chain partners, we support thousands of jobs, mostly in the North East and Yorkshire. These are good, green jobs in exactly the kind of industries ministers say they want to grow. 

The Government supported the creation of this industry in 2008 through long-term commitments with what was called the Renewable Transport Fuel Obligation. Ministers of all flavours have repeatedly reaffirmed its strategic value. Most recently this was by keeping tariffs in place after Brexit and by convening discussions across Whitehall earlier this month with industry to identify how the sector, already struggling due to unfair competition from the US, could be sustained. 

And yet, today, this vital sector is now facing imminent collapse because of the trade deal. In our current situation, we will have to close these plants.

Bioethanol plays a critical role in decarbonising transport. It powers the UK’s standard E10 petrol blend, reducing emissions from every litre at the pump. Its production also delivers two essential by-products: high-protein animal feed and carbon dioxide. CO₂ is indispensable across the economy – from its importance to the NHS for its operating theatres to cooling nuclear reactors. For the food and drink sector, it is used for everything from preserving packaged food to carbonating drinks. 

The National Farmers’ Union has warned of the consequences the trade deal poses for Britain’s agricultural and ethanol industries. Jointly, our plants purchase more than two million tonnes of wheat annually. We have already made commitments to farmers, and customers, which we will, of course, fulfil. But we are fast approaching the point where we need to decide whether to sign new contracts. In the current conditions, that would be irresponsible. 

Hundreds of growers will lose a dependable market for wheat that cannot be used in breadmaking. Instead, they’ll be forced to export it at lower prices, while facing higher costs for imported animal feed.

Without urgent government action, the UK’s bioethanol industry will simply vanish, leaving the country dependent on imported ethanol – while also losing significant domestic production of carbon dioxide and high-protein animal feed.

We’ve seen this kind of vulnerability before. In 2022, a national CO₂ shortage sparked headlines about lager shortages during the World Cup. More seriously, it risked delaying NHS operations and threatened the shutdown of nuclear reactors.

The risk extends beyond the immediate. Both of our sites could produce sustainable aviation fuel (SAF) – a central ambition of the Prime Minister’s government. But without a stable domestic ethanol base, one promising route for British SAF production will struggle to take off. And why should any investor back the next generation of clean fuels if policy can be overturned overnight? Other countries are backing that potential. The UK is on the verge of turning its back.

Our recent discussions with ministers offered hope of fixing the regulatory imbalance that’s undermining the industry. The trade deal, as it stands, will reverse that progress - and more. We’re not asking for special treatment – only fair rules, stable policy, and, importantly, recognition of the strategic value sovereign bioethanol production brings to the UK.

The Prime Minister deserves a great deal of credit for unlocking the deal with Washington. Now he must move quickly to protect what it puts at risk. Britain’s bioethanol industry is a strategic national asset, supporting thousands of jobs, and is critical to the country’s net zero ambitions and food security. 

It must not be sacrificed for a deal that solves one problem by creating another.

For further information, please contact:

Associated British Foods:

+44 20 7399 6545

Chris Barrie, Corporate Affairs Director

Public First:

Ed Dorrell: +44 (0)7779 782583