The air around Hull’s Vivergo Fuels plant still carries a faint whiff of yeast, but inside, the once-bustling machinery has come to a near standstill. On Monday, August 18, 2025, the UK’s largest bioethanol facility will begin shutting down, a move that signals not just the end of an era for the plant, but also a seismic shift for Britain’s renewable energy ambitions and its agricultural sector. This closure, which will see the first redundancies take effect on Tuesday, August 19, comes after the government decided not to offer a rescue package for the sector, despite months of lobbying and warnings from industry leaders.
Vivergo Fuels, owned by Associated British Foods (AB Foods), and Ensus, which operates the second major UK bioethanol plant in Redcar on Teesside, had made it clear: without government support, they would be forced to close. Their warnings followed a US-UK trade pact, agreed in May, that removed a 19% tariff on ethanol imported from the United States—up to a quota of 1.4 billion litres, which is roughly the entire size of the UK market. According to the BBC, both companies claim this trade agreement has rendered their businesses “commercially unviable.”
For those unfamiliar, bioethanol is a renewable fuel made from wheat, other grains, or sugar beet, and is blended into petrol—such as E10—to power cars across the country. The Vivergo plant alone processes about 3,000 tonnes of wheat daily, with over 100 lorries passing through its gates each day, as reported by Sky News. The plant’s closure will directly impact its 160 employees—many of whom live locally and are now facing an uncertain job market—but the ripple effects are expected to reach much further.
“We’ve effectively given the whole of the UK market to the US producers,” said Ben Hackett, managing director at Vivergo, in an interview with Sky News. He argued that the US industry’s subsidies and the ability to use genetically modified crops, among other advantages, made competition impossible. “If we were to have the same support that the US industry has, if we could use genetically modified crops, we wouldn’t need that tariff. We would be able to compete. If we had the same energy costs. We wouldn’t need those tariffs.”
It’s not just the staff on site who are worried. Vivergo buys wheat from more than 4,000 farms across Yorkshire and Lincolnshire, providing a crucial domestic market for British agriculture. The National Farmers Union has warned that biofuels “are extremely important for the crops sector, and their domestic demand of up to two million tonnes can be very important to balance supply and demand and to produce up to one million tonnes of animal feed as a by-product.”
The supply chain implications are even broader. Ensus, for example, produces 30% of the UK’s commercial carbon dioxide, which is used in everything from soft drinks to medical applications and the nuclear industry. If both plants close, Britain could lose as much as 80% of its CO2 output, exacerbating already tight supplies across Europe and threatening sectors from meat-packing to healthcare.
Employees have voiced their distress over the looming redundancies. Mike Walsh, a logistics manager at Vivergo with 14 years’ experience, told Sky News, “It’s not a great place to be at the moment. It’s a very well paid, very high-skilled role and they’ve given everybody an opportunity in an area that doesn’t pay that well… The jobs market isn’t as good as what people would like. So it does impact the local economy.” Claire Wood, lead productions engineer, added, “I moved here after a career in oil and gas for 10 years, partly because I want to be part of the transition to renewable fuels. I can see so much potential here and it’s absolutely devastating to know that this place might be closed very, very shortly and that all that potential just goes away.”
For the government, the decision not to intervene wasn’t taken lightly. A spokesperson explained, “After working with the companies over weeks to understand the financial challenges they have faced over the past decade, the government has 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.” The government has pledged to work with trade unions, local partners, and the companies to support those affected, acknowledging that this is a “difficult time for the workers and their families.”
Yet, critics argue that the government’s stance undermines its own green energy ambitions. Charlotte Brumpton-Childs, national officer for the GMB union, told the BBC, “They’re not numbers in a spreadsheet. These are lives put on hold and communities potentially devastated.” She added, “A clean energy industrial strategy means nothing if we cannot protect plants long enough to deliver clean energy jobs here in the UK.”
The US-UK trade deal at the heart of the controversy allows 1.4 billion litres of American ethanol to enter the UK tariff-free, down from the previous 19% duty. For Vivergo and Ensus, this change has been catastrophic. According to Sky News, Vivergo was already losing about £3 million a month, blaming not just the trade deal, but also regulations that allow US companies to earn double subsidies—particularly those using by-products like Uldr from corn processing, which some argue isn’t a genuine waste product.
Industry leaders have called for more than just financial support. They want regulatory changes, including an increase in the mandated renewable fuel content in petrol from 10% to 15%, and an expansion into aviation fuels—areas where British companies could still carve out a future. The government, for its part, has stated its intention to ensure that by 2030, 10% of all aviation fuel comes from sustainable sources, including bioethanol.
Despite these ambitions, sector insiders say that delays over the migration to petrol with higher bioethanol content have already hurt the industry. The lack of a clear, supportive regulatory and commercial environment has left British bioethanol at a disadvantage compared to better-supported US rivals.
AB Foods, which owns Vivergo, expressed its disappointment in a statement to the BBC: “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 company argued that the plant “should always have been profitable under the right regulatory environment, as similar plants in western Europe demonstrate.”
With Vivergo and Ensus employing 270 people directly, and thousands more livelihoods tied up in the supply chain, the closure marks a significant setback for Britain’s clean energy sector and rural economy. The government has said it will continue to work on measures to ensure the resilience of the CO2 supply chain and support affected workers and families, but for many in Hull and beyond, the future looks uncertain.
As the last lorries leave the quieted plant and the workers face an anxious week ahead, the debate over the UK’s energy future—and its willingness to back that future with meaningful support—remains far from settled.
