London: Britain’s bioethanol sector is facing collapse after the government ruled out financial aid for producers hit by a trade deal with the United States, reports The Edge Malaysia.
A government spokesperson said on Friday, “We have taken the difficult decision not to offer direct funding as it would not provide value for taxpayers or solve the industry’s long-term problems.”
Under the agreement signed by former Prime Minister Theresa May, the UK cut its 19% tariffs on U.S. ethanol to zero within a quota of 1.4 billion litres — equal to the size of the entire British ethanol market.
The UK has two main bioethanol plants, Associated British Foods’ Vivergo facility and Ensus, owned by Germany’s Südzucker Group, both located in northern England. Together, they make up almost all of the country’s production capacity.
AB Foods warned in June it would shut the Vivergo plant by September without government support. Ensus has also said its plant is at risk of closure.
A spokesperson for AB Foods said it was “deeply regrettable that the government has chosen not to support a key national asset.” Ensus did not immediately comment.
Industry groups say the trade deal, combined with existing rules that give U.S. producers an edge, has made operations unviable. The sector directly supports thousands of jobs in the UK.
Bioethanol, made from crops like wheat, is used to reduce emissions in petrol and as a feedstock for sustainable aviation fuel.
