Britain’s bioethanol industry is staring down a crisis of historic proportions after the government’s refusal to grant a taxpayer-funded bailout, a move that has left thousands of jobs hanging in the balance and triggered a cascade of warnings about the future of domestic clean energy. The hullabaloo erupted following a controversial trade pact, endorsed by Labour leader Keir Starmer and former U.S. President Donald Trump, which slashed tariffs on American ethanol imports and, in one fell swoop, upended the economics for homegrown producers.
On August 16, 2025, the government confirmed its decision not to provide direct financial support to the sector. The consequences were immediate and severe: Vivergo Fuels, one of the UK’s largest bioethanol plants and a subsidiary of Associated British Foods (ABF), announced plans to close its Hull facility. The closure puts about 170 direct jobs at risk, with a further 4,000 roles in the supply chain now under threat, according to reporting from The Sunday Times and Daily Mail.
Bioethanol, produced from crops such as wheat, corn, or sugar beet, is a key additive in E10 petrol, which is widely used across Britain. The industry’s future was thrown into doubt after the UK government, following the Starmer-Trump accord, agreed to lift a 19 percent levy on ethanol imports. This opened the door to a flood of cheap U.S. ethanol—an eye-watering 1.4 billion litres annually—making it nearly impossible for British producers to compete on price.
It’s a move that has sparked outrage and concern across the political and industrial spectrum. Unions have lambasted the decision, claiming it amounts to outsourcing British jobs. "The Government is choosing to effectively ship jobs abroad," one union representative told Daily Mail. Vivergo’s parent company, ABF, didn’t mince words either, describing the lack of support as “deeply regrettable.” In a statement, ABF warned, “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, for its part, stood firm. A spokesperson explained, “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.” This rationale, however, has done little to mollify critics who argue that the government is failing to protect a strategically vital sector.
According to The Sunday Times, the trade deal struck by Starmer and Trump was intended to foster closer economic ties and lower barriers between the UK and the U.S. Yet, the unintended consequence has been to expose Britain’s bioethanol producers to a tidal wave of competition from across the Atlantic. The removal of the 19 percent import levy left domestic firms reeling, with many warning that they would be unable to survive in a market suddenly awash with cheaper American ethanol.
Vivergo Fuels and Ensus, the two major players in the UK bioethanol sector, had both cautioned that without government intervention, their operations would become “commercially unviable.” While Vivergo has announced closure plans, Ensus—owned by a German conglomerate and based in North Yorkshire—is continuing to negotiate with ministers. The Ensus plant, which produces nearly a third of the UK’s commercial carbon dioxide (a crucial by-product used in everything from fizzy drinks to the medical and nuclear industries), has a unique bargaining chip. Its continued talks with the government underscore the broader industrial ramifications of the bioethanol sector’s collapse.
The fallout doesn’t end with lost jobs. The closure of domestic bioethanol plants threatens to undermine Britain’s ambitions in clean energy and climate change mitigation. Bioethanol is a renewable fuel that reduces greenhouse gas emissions compared to traditional petrol. Its production supports British agriculture, providing a vital market for wheat and other crops. With the new trade regime in place, British wheat farmers now face the prospect of losing a key source of demand, compounding the challenges they already face from volatile weather and global commodity markets.
Industry insiders have sounded the alarm about the broader economic and environmental impacts. As ABF put it, the government’s decision “discarded billions in potential growth in the Humber region,” a part of the country that has long been touted as a future hub for green industry and innovation. The loss of bioethanol production could also ripple through other sectors, from agriculture to manufacturing and logistics, amplifying the economic pain.
Unions and local leaders have voiced frustration that the government’s inaction will see clean energy jobs and expertise migrate overseas. “Clean energy jobs will move overseas,” ABF warned, echoing concerns that the UK is squandering a chance to lead in sustainable fuels. The sense of missed opportunity is palpable, especially given the global push toward decarbonization and the transition away from fossil fuels.
Critics also argue that the government’s justification—protecting taxpayers from poor value for money—misses the bigger picture. As one union official told Daily Mail, the decision is “short-sighted” and “fails to account for the long-term benefits of a strong domestic bioethanol sector.” Supporters of the industry point out that the sector not only provides jobs and economic growth but also enhances national energy security by reducing reliance on imported fuels.
For many in Hull and the surrounding Humber region, the closure of the Vivergo plant feels like the latest in a string of industrial setbacks. The area, once a powerhouse of British manufacturing, has seen its fortunes wane in recent decades. The promise of a green industrial renaissance had offered a glimmer of hope, but the current crisis threatens to dash those aspirations.
Meanwhile, the Ensus plant’s ongoing negotiations with ministers highlight the complex web of interests at play. As one of the UK’s leading producers of commercial carbon dioxide, Ensus’s operations are critical not just for fuel but for a host of other industries. The government’s willingness to keep the dialogue open with Ensus suggests that, while the door may be closed for Vivergo, the broader fate of the sector is not yet sealed.
As the dust settles on the government’s decision, the future of Britain’s bioethanol industry remains uncertain. Will further talks yield a lifeline for the remaining players? Or is this, as some fear, the beginning of the end for domestic bioethanol production? For the thousands whose livelihoods depend on the sector, and for the regions that have pinned their hopes on a green recovery, the coming months will be critical.
One thing is clear: the debate over Britain’s place in the global clean energy race is far from over. The choices made now will echo for years to come, shaping not just the fate of an industry, but the country’s broader ambitions in sustainability, innovation, and economic resilience.
