The UK’s largest bioethanol plant, Vivergo Fuels, is set to close its doors for good after the government confirmed on August 15, 2025, that it would not provide a bailout or direct funding to the struggling sector. The closure, which will begin with layoffs starting Monday, August 18, has sent shockwaves through the Humber region, the agricultural supply chain, and the wider clean energy industry. With 160 jobs lost at the Lincolnshire site and thousands more livelihoods indirectly threatened, the aftermath is being described by industry leaders and unions as a devastating blow to British manufacturing and green ambitions.
Vivergo, owned by Associated British Foods (ABF), had issued stark warnings for months that the plant would become unviable without government support. According to Sky News, the company had been losing £3 million a month even before a recent UK-US trade deal removed a 19% tariff on imported American ethanol. That trade agreement, finalized in May 2025, was celebrated by the government for protecting jobs in the automotive and aerospace industries by slashing US import taxes on UK goods. However, it also opened the door for heavily subsidized US ethanol to flood the British market, a move Vivergo claims pushed the domestic sector to the brink.
Ben Hackett, managing director of Vivergo Fuels, did not mince words in his reaction. “The Government’s failure to back Vivergo has forced us to cease operations and move to closure immediately,” he said, as reported by the Press Association. “This is a flagrant act of economic self-harm that will have far-reaching consequences. This is a massive blow to Hull and the Humber. We have fought from day one to support our workers and we are truly sorry that this is not the outcome any of us wanted.”
Hackett emphasized the ripple effect of the closure, noting that thousands of jobs in the supply chain—ranging from farmers and hauliers to engineers—now hang in the balance. “We did everything we possibly could to avoid closure, but in the end it was the Government that decided the British bioethanol sector was something that could be traded away with little regard for the impact it would have on ordinary hard-working people,” Hackett added. He expressed hope that the outcry over the decision would make ministers “think twice before it decides to sign away whole industries as part of future trade negotiations.”
The numbers behind Vivergo’s operation underscore its significance. The Hull plant, which employs around 160 people directly, is capable of producing up to 420 million litres of bioethanol a year from wheat sourced from over 4,000 UK farms. Over the past decade, the company has purchased wheat from a staggering 12,000 farms, providing a vital market for British agriculture. Beyond fuel, the plant is also the UK’s largest single production site for animal feed, and Vivergo estimates it indirectly supports about 4,000 jobs in the Humber and Lincolnshire region.
Vivergo’s importance isn’t just historical. The company recently signed a £1.25 billion memorandum of understanding with Meld Energy to anchor a “world-class” sustainable aviation fuel facility at the Hull site. However, Meld Energy has warned that uncertainty over the bioethanol industry’s future is putting this ambitious plan—and the jobs it would create—in jeopardy.
Associated British Foods, which also owns Primark, expressed deep regret at the government’s decision. “It is deeply regrettable that the Government has chosen not to support a key national asset,” a spokesperson told Sky News. “We have been left with no choice but to announce the closure of Vivergo and we have informed our people. We have been fighting for months to keep this plant open. We presented a clear plan to restore Vivergo to profitability within two years under policy levers already aligned with the Government’s own green industrial strategy.” The company accused ministers of having “thrown away billions in potential growth in the Humber and a sovereign capability in clean fuels that had the chance to lead the world.”
The government, for its part, defended its decision as a matter of fiscal responsibility and national interest. “Direct funding would not provide value for the UK taxpayer or solve the long-term problems of the bioethanol industry,” a government spokesperson said, according to BBC News. “This government will always take decisions in the national interest. That’s why we negotiated a landmark deal with the US which protected hundreds of thousands of jobs in sectors like auto and aerospace.” The government added that it had worked closely with Vivergo and other companies since June to understand their financial challenges but ultimately decided against a bailout after determining the plant had not been profitable since 2011.
Recognizing the human cost, the government pledged to work with trade unions, local partners, and the companies to support affected workers and their families. It also promised to continue developing proposals to ensure the resilience of the UK’s CO2 supply—a nod to the Ensus plant on Teesside, the UK’s second major bioethanol facility, which produces 30% of the country’s commercial carbon dioxide. Ensus, owned by the German firm CropEnergies, has also warned of closure risk and is in discussions with ministers about securing the future of its CO2 production, which is critical for industries from soft drinks to nuclear power.
Union leaders have condemned the government’s stance. Sharon Graham, general secretary of Unite, called the decision “short-sighted” and said it “totally disregards the benefits the domestic bioethanol sector will bring to jobs and energy security.” GMB union national officer Charlotte Brumpton-Childs echoed these concerns, stating, “They’re not numbers in a spreadsheet. These are lives put on hold and communities potentially devastated.” She criticized the government’s lack of a coherent green industrial strategy, remarking, “A clean energy industrial strategy means nothing if we cannot protect plants long enough to deliver clean energy jobs here in the UK.”
The National Farmers’ Union (NFU) also weighed in, with chairman Jamie Burrows describing the closure as “terrible news for those hundreds of workers who will lose their jobs but also for the thousands of people whose livelihoods depend on this supply chain – that includes local farmers who have lost a vital market for their product.”
Bioethanol, produced from wheat, other grains, or sugar beet, is a key additive to fuels such as E10 petrol in the UK, helping to reduce carbon emissions. The government has previously stated that by 2030, it wants 10% of all fuel used in planes to come from sustainable sources, with bioethanol expected to play a major role. Yet, as the Vivergo closure shows, the sector is struggling to survive against a backdrop of foreign competition and shifting policy priorities.
As the first round of layoffs at Vivergo begins, the future of the UK’s bioethanol industry hangs in the balance. The closure not only marks the end of a major employer in the Humber, but also raises pressing questions about the government’s commitment to homegrown clean energy and the communities that depend on it.
