Britain’s once-thriving bioethanol industry is now teetering on the brink of collapse, a fate sealed by the government’s recent decision to withhold financial support in the wake of a controversial UK-US trade deal. On August 15, 2025, officials announced they would not bail out the sector, despite urgent warnings from industry leaders and the looming closure of the nation’s two main production plants in northern England. The move has sparked concern among workers, environmental advocates, and local communities who rely on the industry for jobs and economic stability.
The trouble began with the trade agreement negotiated by Prime Minister May’s administration and then-U.S. President Donald Trump. Under this deal, the United Kingdom scrapped its 19% tariff on imported U.S. ethanol, replacing it with a 1.4 billion-litre quota—an amount that matches the entire size of the UK’s ethanol market. According to Reuters, this shift opened the floodgates for American producers, who now enjoy unfettered access to British consumers.
The UK government, for its part, defended its stance. A spokesperson explained, “We … 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.” In other words, officials argue that a bailout would be little more than a temporary fix, failing to address the deeper structural issues that have rendered the domestic bioethanol sector uncompetitive.
The consequences of this decision are already being felt. Associated British Foods (AB Foods), which owns the Vivergo plant in northern England, announced in June that it would shut down operations by September unless the government stepped in with an aid package. The company called the government’s response “deeply regrettable,” lamenting what it sees as the loss of a “key national asset.” The Ensus plant, operated by Germany’s Sudzucker Group and also located in northern England, faces a similarly uncertain future. Ensus has warned that the new market conditions make continued operation all but impossible, although the company has not issued a public comment since the government’s announcement.
These two plants together represent nearly all of the UK’s bioethanol production capacity. Their potential closure threatens thousands of jobs, not only within the facilities themselves but also across the broader supply chain—farmers who grow the wheat used to make bioethanol, truckers who transport raw materials, and engineers who keep the plants running. The industry has long touted its role in supporting rural economies and contributing to the UK’s climate goals by producing fuel that helps make petrol greener and enables the creation of sustainable aviation fuel.
Industry leaders are quick to point the finger at the trade deal and the regulatory environment that, in their view, unfairly favors U.S. producers. According to both AB Foods and Ensus, the removal of tariffs and the introduction of the massive quota have made it impossible for UK-based companies to compete on price. “The trade deal, along with existing regulations that give U.S. producers an advantage in the British market, had made the environment impossible,” AB Foods stated, echoing a sentiment shared by many in the sector.
For years, bioethanol has been produced in the UK from crops such as wheat, a process that not only adds value to British agriculture but also helps reduce the carbon footprint of transportation fuels. The product is blended into petrol to lower emissions and is increasingly seen as a key ingredient in the push toward sustainable aviation fuel—a technology that many experts believe will be crucial in meeting the nation’s ambitious climate targets.
But with the new trade rules in place, British-made bioethanol is being undercut by cheaper imports from the United States. The 1.4 billion-litre quota is equivalent to the entire annual demand in the UK, meaning that domestic producers are now forced to compete head-to-head with American firms that benefit from larger economies of scale and, in some cases, more generous government subsidies. According to Reuters, both AB Foods and Ensus have argued that, without some form of government intervention, their businesses simply cannot survive.
The government’s refusal to intervene has sparked a heated debate about the future of the industry—and what, if anything, should be done to protect it. Supporters of the sector argue that losing the domestic bioethanol industry would be a blow to the UK’s energy security and climate ambitions, not to mention a devastating setback for local economies in northern England. They point out that the industry supports thousands of jobs and plays a vital role in making British fuel supplies more sustainable.
Critics, however, counter that propping up an uncompetitive industry with taxpayer money is not a sustainable solution. They argue that the government’s decision reflects a hard-nosed assessment of economic realities, and that the UK should focus its resources on sectors where it can compete globally. As one government spokesperson put it, direct funding “would not provide value for the taxpayer or solve the long-term problems the industry faces.”
Still, the timing of the announcement has left many in the industry reeling. With the Vivergo and Ensus plants facing imminent closure, workers and their families are now bracing for an uncertain future. Local officials in northern England have expressed concern about the potential economic fallout, warning that the loss of these facilities could have ripple effects throughout the region.
Environmental groups are also watching closely. While some see bioethanol as a necessary bridge to cleaner transportation, others question whether the industry deserves special treatment in a rapidly changing energy landscape. The debate over biofuels is nothing new, but the current crisis has brought the issue into sharp relief, forcing policymakers to confront difficult questions about how best to balance economic, environmental, and social priorities.
As Britain’s bioethanol industry stands at a crossroads, the stakes could hardly be higher. The outcome of this debate will not only determine the fate of thousands of workers and the future of rural economies, but also shape the nation’s path toward a greener, more sustainable energy system. For now, the message from government officials is clear: there will be no bailout. Whether that decision marks the end of an era for British bioethanol—or the beginning of a new chapter—remains to be seen.
