Under the terms of a US-UK trade deal just concluded between Donald Trump and Kier Starmer, the future of potentially carbon-neutral “green” fuel produced in Britain – upon which the survival of internal combustion engines powering motorcycles could one day depend – may be thrown to the dogs.
Trump has agreed to cut his 27.5% tariff on British-manufactured cars to 10% for the first 100,000 vehicles shipped from the UK to the US each year. This aspect of their deal claims to save thousands of UK automotive jobs and will mainly benefit upmarket exporters Bentley and Jaguar Land Rover, which are incidentally owned by German and Indian parents.
But, in return, the UK has offered the US a zero-tariff quota of 13,000 tonnes on beef and an extraordinary 1.4 billion litres of bioethanol annually, respectively produced from US cattle farmers and maize growers. The latter, heavily subsidised without any ongoing supply certainty and equivalent to the entire current annual ethanol demand in the UK, is set to swamp the UK’s only two bioethanol plants, forcing them out of business.
These plants, Ensus in Wilton on Tees-side and Vivergo at Saltend near Hull in East Yorkshire, are presently responsible for manufacturing the E10 element in petrol already sold on UK forecourts and employ more than 7000 workers throughout their supply chains. A projected trajectory of moving to E40 and then eventually fully carbon-neutral E100 pump fuel is therefore in jeopardy.
The biggest player Vivergo was originally established in 2007 as a joint venture between ABF Sugar, BP and Du Pont to create a future-facing biofuels operation. ABF Sugar subsequently became its sole shareholder. At the moment, the £450m Vivergo plant can distil up to 420 million litres of bioethanol per year from more than one million tonnes of non-food-grade wheat, unsuitable for milling into flour for bread or pasta. This is sourced from thousands of farms, mostly across Yorkshire and Lincolnshire. It is also the UK’s largest single production site for high-protein animal feed, delivering over 400,000 tonnes to farms throughout the country.
So far, the government’s response has been lamentable. Weeks before Starmer did his deal with Trump, the Department for Business and Trade said it was “working closely with the companies affected to consider what options may be available to support them.” But no solutions emerged. Since then, ABF Sugar has delivered an ultimatum to the government, following an emergency meeting with Business Secretary Jonathan Reynolds and Transport Secretary Heidi Alexander, demanding that the government come up with a rescue package within two weeks. The alternative would be opening consultations to make the plant’s workforce redundant.
ABF Sugar chief executive Paul Kenward has said that investors would no longer support continued losses when the government wasn’t offering any support, unless he had a copper-bottomed guarantee that the regulatory regime will change. And officials at the Department for Business and Trade had admitted in calls to industry leaders that they had been blindsided by the decision to offer a tariff-free quota to US producers. His plant had only made a profit for six months since the E10 mandate was introduced in 2021, which he blames on the way the UK bioethanol market is regulated. Kenward also notes that plants in Europe identical to those in the UK are profitable because they are shielded from US imports. His Vivergo Fuels managing director, Ben Hackett, added: “The Department for Transport was perpetuating our demise, and the Department of Business and Trade is now accelerating it.”
As we went to press Vivergo continued that unless the government provided it with the necessary financial support, it will close its Hull bioethanol plant on 25 June. Ensus says it will make a decision on the future of its Teesside operation “in a matter of weeks”.