Vivergo, the ethanol plant owned by Associated British Foods Plc and one of only two major facilities of its kind in the UK, has begun closing-down procedures as an influx of US duty-free ethanol threatens to impact domestic production, reported Bloomberg.
According to the company, a consultation with employees to enact a wind-down of operations of the site in northern England has begun. Operations are set to end on September 13 unless the UK government intervenes with industry support.
For weeks, British ethanol producers have raised concerns that the 1.4 billion liters of duty-free ethanol included in a US-UK trade agreement could devastate the UK market. Vivergo stopped purchasing wheat, its primary feedstock, on June 11. Meanwhile, Ensus Ltd., the country’s other main producer, has also warned of an similar shutdown.
Vivergo is in discussions with the government, which has agreed to a formal consultation. However, the company stated that “unless the Government is able to provide both short-term funding to cover Vivergo’s losses and a long-term solution, we intend to close the plant.”
Vivergo has warned that 4,000 jobs in the UK bioethanol industry could be affected, including farmers who grow the wheat that produces the fuel.
