A new trade deal between the UK and US President Donald Trump’s administration is raising alarm among British ethanol producers, who warn that tariff-free US imports could devastate the domestic biofuel industry, reports Bloomberg.
As part of the trade framework announced on Thursday, the UK has agreed to fast-track US goods through customs and lower trade barriers on a wide range of products. Among the most controversial elements is the removal of import duties on 1.4 billion liters (370 million gallons) of ethanol from the US.
The National Alcohol Producers Association (NAPA) called the move “disastrous” for British ethanol makers. “Even now, with tariffs in place, US ethanol is already highly competitive in both the UK and European markets,” said Phillip Davison, NAPA Chairman and Secretary. “Removing the tariff makes it nearly impossible for UK producers to stay in business.”
The US, a leading global ethanol producer, primarily uses corn and sugar crops for fuel production. In the 2023–24 marketing year, it exported around 227 million gallons of ethanol to the UK, according to the US Grains Council.
British biofuel businesses say the removal of import tariffs will not only hurt them but also ripple through the European market, pushing prices down and threatening investments. The Vivergo and Ensus plants—two major ethanol production facilities in northern England—are particularly at risk.
“The government’s last-minute decision is creating serious concern among people in the northeast, especially among employees, suppliers, and farmers tied to the bioethanol industry,” said Associated British Foods Plc, which operates the Vivergo plant.
Ensus echoed the uncertainty, stating that the agreement casts doubt on the long-term viability of domestic bioethanol production, although it said more analysis is needed before making further comments.
British farmers, too, are worried. The National Farmers Union warned that the deal could hit local agriculture, as farmers who grow crops for ethanol could lose key markets. Ethanol production also generates animal feed as a byproduct, which would also be affected.
Responding to the backlash, a spokesperson for Prime Minister Keir Starmer, Tom Wells, said the government has held talks with businesses affected by the ethanol provisions and promised ongoing engagement “in the coming weeks and months.”
The development adds another layer of complexity to the UK’s evolving trade relationships post-Brexit and raises fresh questions about balancing free trade with support for domestic industries.
