Britain’s bioethanol sector, once hailed as a cornerstone of the nation’s ambitions for clean energy and industrial resilience, is now facing a dramatic reckoning. The UK Government’s recent decision to withhold emergency funding from its two largest producers—Vivergo Fuels near Hull and Ensus on Teesside—has sent shockwaves through the industry, threatening thousands of jobs, regional economies, and even the country’s food and medical supply chains. The move follows the end of a 19% tariff on US-imported bioethanol as part of a new UK-US trade pact, opening the floodgates to cheaper American imports and putting domestic producers on the brink of collapse.
Vivergo Fuels, owned by Associated British Foods (ABF), has announced it is preparing to close its Hull plant, which directly employs around 160 people and supports many more in the local supply chain. ABF’s spokesperson didn’t mince words, stating, “We have been fighting for months to keep this plant open. We initiated and led talks with Government in good faith. 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.” According to The Yorkshire Post, the company expressed deep frustration, arguing the Government’s decision has “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 impact is not limited to direct employees. ABF’s statement continued, “Jobs in clean energy will now move overseas – principally to the US but also to other countries with a more sensible regulatory environment.” The company lamented the loss to local communities, noting, “The loss of Vivergo will be felt most acutely by our dedicated workforce and their families and by the thousands whose livelihoods depend on our supply chain – from farmers to hauliers and engineers.” In a further twist of the knife, ABF said it was “hugely disappointed, on their behalf, that the press was informed of this decision before we were told – and before we had a chance to communicate to our staff.”
For Ensus, the situation is precarious but not yet terminal. The Teesside facility, which employs over 100 people directly and thousands more indirectly, is the UK’s last remaining major producer of biogenic carbon dioxide—a critical byproduct of bioethanol production. This CO2 is essential for everything from fizzy drinks to hospital procedures and even nuclear power, supplying up to 60% of the nation’s needs. Grant Pearson, chairman of Ensus UK, met with Minister Sarah Jones to discuss the Government’s response. He described the talks as a “positive” step, explaining, “They are therefore looking at options to secure an ongoing supply of CO2 from the Ensus facility. This is positive news, however it is likely to take time to agree upon and finalise and therefore urgent discussions will be taking place to provide a level of assurance to the Sudzucker and CropEnergies Boards that there is a very high level of confidence that an acceptable long term arrangement can be reached.”
Redcar MP Anna Turley, who represents the area around the Ensus plant, underscored the facility’s importance: “This plant matters – not just for our local economy but for our national supply chains and our industries of the future. I’m determined to make sure Ensus stays here in Redcar & Cleveland and continues to play its vital role in both our green economy and our food security.”
The Government’s position, meanwhile, has been one of pragmatism—at least in its own view. A spokesperson said, “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 official added, “We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade, and 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.”
That explanation has done little to soothe union leaders or industry advocates. Sharon Graham, general secretary of Unite, blasted the move, saying, “This is a short-sighted decision that totally disregards the benefits the domestic bioethanol sector will bring to jobs and energy security. Once again, the government total lack of a plan to support oil and gas workers as the industry transitions is glaring.” The National Farmers’ Union (NFU) echoed the sense of betrayal, with combinable crops board chairman Jamie Burrows warning, “Not only is it 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 production in the UK is such an important industry.”
Burrows highlighted that at its peak, the bioethanol sector consumed up to 1.2 million tonnes of wheat a year—about 8% of the UK crop. “We need Government to recognise the potential economic growth and value of this market by ensuring crops grown for biofuels are used increasingly in road transport and aviation. This will open up further market opportunities to incentivise growers to support the country’s biofuel plants.”
The collapse of the industry is rooted in the recent UK-US trade agreement, championed by Labour leader Keir Starmer and former US President Donald Trump. The deal removed the 19% levy on US ethanol imports, allowing 1.4 billion litres of American ethanol to enter the UK market tariff-free. As reported by The Daily Mail, this has raised fears that domestic suppliers simply cannot compete with the lower-priced imports, and British wheat farmers would lose a crucial market for their crops. The bioethanol industry, which produces nearly a third of the UK’s commercial carbon dioxide, is not just about fuel—it’s woven deeply into the fabric of the food and drink sector, as well as medical and nuclear industries.
Unions and local officials warn that the decision effectively “ships jobs abroad.” The consequences aren’t just economic; they’re strategic. ABF cautioned, “In making this decision, the Government has thrown away billions in potential growth in the Humber, a sovereign capability in clean fuels that had the chance to lead the world.”
The Government, however, remains unmoved on the issue of direct intervention. “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. We also continue to work up proposals that ensure the resilience of our CO2 supply in the long-term in consultation with the sector,” a spokesperson said. But for many, these words ring hollow as the reality of job losses and plant closures sets in.
For Britain’s bioethanol industry, the future now hangs in the balance. While the Government’s focus on taxpayer value and long-term solutions is clear, the cost in jobs, regional economic vitality, and even national supply chain security is equally stark. As Ensus’s fate remains uncertain and Vivergo’s closure looms, the coming months will reveal whether the UK can salvage any part of its bioethanol infrastructure—or if, as many fear, clean energy jobs and strategic capabilities will indeed be exported abroad.
