US-UK trade agreement potential catalyst for the demise of a massive renewable energy facility in Hull, United Kingdom
In the heart of Hull, the once bustling Vivergo bioethanol production facility has fallen silent, marking a significant blow to the UK's bioethanol industry. The plant, which typically processes more than 100 lorries carrying 3,000 tonnes of wheat daily, is on the verge of closing down, awaiting a last-minute reprieve from the government.
The UK bioethanol industry is grappling with economic displacement following a recent US trade deal that opened the market to duty-free ethanol imports. The agreement allows 1.4 billion litres of American ethanol into the UK tariff-free, a move that Vivergo's managing director, Ben Hackett, believes has given the entire UK market to US producers. This has led to financial struggles for domestic producers such as Vivergo Fuels and Ensus, with Vivergo losing about £3m a month due to competition from US rivals.
The closure of the Vivergo plant could lead to redundancies for its 160 staff and impact local businesses such as haulage companies and farmers. Moreover, if both Vivergo and Ensus were to close, Britain could lose up to 80% of its carbon dioxide output, potentially compounding shortages across various sectors, including meat-packing and healthcare.
The National Farmers Union emphasizes the importance of biofuels for the crops sector, stating they can balance supply and demand and produce up to one million tonnes of animal feed as a by-product. However, the industry is facing significant regulatory challenges. One such issue concerns the Sustainable Aviation Fuel (SAF) mandate introduced in 2025, which currently caps the share of SAF derived primarily from HEFA (hydroprocessed esters and fatty acids) made from waste fats and oils.
The Renewable Transport Fuels Association (RTFA) has urged the UK government to reform the SAF mandate to include UK-produced crop-based bioethanol—currently displaced from the road fuel market due to the trade deal—to be eligible under the SAF mandate via the alcohol-to-jet (AtJ) pathway. They argue this amendment would help repurpose domestic bioethanol production for decarbonizing aviation fuels and sustain the industry.
However, government responses have so far prioritized fiscal prudence, with spokespeople stating that direct funding would not provide value for taxpayers or solve long-term structural challenges. The government is exploring increasing ethanol blending in road fuels to support the sector, but this change may come too late for producers like Vivergo.
Industry leaders are calling for an increase in the mandated renewable fuel content in petrol from 10% to 15% and an expansion into aviation fuels to grow the market. They also question rules awarding double subsidies to companies using waste products in their bioethanol production, as US companies are using corn by-products (Uldr) that are not considered genuine waste products.
Despite the challenges, the government has stated its commitment to addressing the plant's challenges and protecting supply chains, jobs, and livelihoods. They are in talks with Vivergo since June and have emphasized the importance of maintaining energy certainty and supply from the UK. However, the time for talks may be running out.
The final product at the Vivergo plant is bioethanol, a renewable fuel that is blended into E10 petrol. Another bioproduct from Vivergo is carbon dioxide, which can be used in drinks fizzing or food packaging preservation. The government is being urged to create a regulatory and commercial environment that allows the bioethanol industry to thrive. Without action, the UK could face a significant loss in its renewable energy production and related industries.
- The closure of the Vivergo bioethanol plant in Hull, processing more than 100 lorries of wheat daily, has put the UK's bioethanol industry in a precarious position, faced with economic displacement due to a US trade deal.
- The Renewable Transport Fuels Association (RTFA) has urged the UK government to amend the Sustainable Aviation Fuel (SAF) mandate to include UK-produced crop-based bioethanol for decarbonizing aviation fuels, aiming to sustain the industry.
- In addition to increasing the mandated renewable fuel content in petrol from 10% to 15%, industry leaders also call for expanding into aviation fuels and reforming rules that award double subsidies to companies using waste products in bioethanol production.
- Despite the regulatory challenges and impending closure of the Vivergo plant, the government has emphasized its commitment to addressing the issues, maintain energy certainty and supply, protect jobs, and create a regulatory and commercial environment that allows the bioethanol industry to thrive, otherwise the UK could face a significant loss in its renewable energy production and related industries.
