On August 18, 2025, the UK’s bioethanol sector was dealt a seismic blow as Vivergo, one of only two bioethanol plants in the country, announced it would immediately begin the process of shutting down its operations. The closure, which follows months of uncertainty and tense negotiations, is set to leave 160 employees without jobs and has triggered wide-ranging concerns about the future of green energy, UK farming, and industrial supply chains.
Vivergo, owned by Associated British Foods (ABF), has long played a dual role in the UK economy: producing bioethanol, a fuel additive vital for reducing emissions in petrol and sustainable aviation fuel, and supplying animal feed to UK farms. But, as ABF revealed in a statement, the company’s commercial viability was undermined by a combination of regulatory hurdles and shifting international trade dynamics. After “extensive discussions” with the government, ABF concluded it could not operate Vivergo on a “profitable and sustainable basis.”
The immediate catalyst for Vivergo’s demise was the UK’s trade deal with the United States, signed in May 2025. The deal eliminated a 19% tariff on US-imported ethanol up to a quota of 1.4 billion liters—a volume roughly matching the entire UK market. According to BBC, this was part of a broader agreement that also protected UK auto and aerospace jobs from threatened US tariffs. However, the move dramatically increased competition for domestic producers like Vivergo, who were already struggling with what they described as unfair regulatory treatment. US ethanol imports, certified as a waste byproduct in the UK, enjoy a financial advantage that domestic bioethanol does not.
"These discussions were necessary because Vivergo’s commercial viability was undermined by the way in which UK regulations were being applied to favour foreign producers, an issue subsequently made much worse by the government’s decision in May to remove the tariffs on US bioethanol coming into the UK market," ABF said in a statement reported by BBC. "These two actions meant Vivergo would inevitably continue to be heavily loss-making without corrective government intervention to provide short-term financial support and a longer-term regulatory solution."
After weeks of talks, the government announced on August 15, 2025, that it would not provide financial support for the sector. Officials argued that a rescue package would not offer value for taxpayers or address the industry’s underlying challenges. In the words of a government spokesperson, "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 spokesperson added, "Direct funding would not provide value for the UK taxpayer or solve the long-term problems of the bioethanol industry."
The impact of the closure goes beyond Vivergo’s workforce. Ben Hackett, Vivergo’s managing director, did not mince words, describing the government’s decision as a "massive blow to Hull and the Humber" and "a flagrant act of economic self-harm." He warned that the loss would ripple through the region, affecting suppliers and customers, especially UK farmers who now face the daunting task of finding alternative outlets for non-food-grade wheat previously bought by the plant.
Andrew Symes, the chief executive of OXCCU—a company specializing in sustainable aviation fuel—spoke to the BBC’s Today programme about the risks of the UK becoming increasingly dependent on imports for both ethanol and CO2. "I think that was probably what wasn't realised when the trade deal was done," Symes explained. He cautioned that the closure would make the nation vulnerable, especially since CO2 is widely used in food production, healthcare, and other critical industries.
Vivergo itself had plans to start capturing CO2 produced during the bioethanol process, but those ambitions never materialized. Meanwhile, the UK’s only other bioethanol plant, located in Redcar, Teesside and owned by German firm Ensus, is anxiously awaiting word from the government on whether it will receive support to protect its own CO2 production. The uncertainty has left many in the sector fearing that further closures could follow, compounding the risks to the UK’s energy resilience and food supply chains.
Charlotte Brumpton-Childs, GMB National Officer, highlighted the contradiction between the government’s stated commitment to green policies and its actions. "A clean energy industrial strategy means nothing if we cannot protect plants long enough to deliver clean energy jobs here in the UK," she said, underscoring the sense of frustration among labor leaders and environmental advocates.
For Vivergo’s 160 employees, the news is devastating. Layoffs are scheduled to begin on August 19, 2025, with all staff expected to be gone and the site readied for demolition by the end of the year. The government has pledged to work with trade unions, local partners, and companies to support affected workers during the transition. "We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process," a government spokesperson said.
ABF, for its part, will oversee an "orderly closure process," confirming that all bioethanol and animal feed production will cease by August 31, 2025. The company cited the financial losses already incurred and the absence of either short-term government support or long-term regulatory certainty as reasons for its decision. "Given these circumstances and the financial losses already incurred, ABF has therefore determined in the interests of its shareholders that it cannot continue to support Vivergo," the company stated.
While the government maintains that the US trade deal was in the national interest, some industry observers and local leaders argue that the costs to the UK’s green energy ambitions and rural economies could be severe. The closure of Vivergo is expected to make the UK even more reliant on imported ethanol and CO2, potentially raising prices and reducing energy security. The government, however, says it is "continuing to work on proposals that would ensure the resilience of our CO2 supply in the long-term."
As the dust settles, the fate of the UK’s only remaining bioethanol plant hangs in the balance, and the country faces tough questions about how to balance international trade priorities with the needs of domestic industries and climate goals. For the workers at Vivergo and the communities of Hull and the Humber, the closure marks the end of an era—and the beginning of a period of profound uncertainty.
