UK’s £1.2 billion bioethanol industry at risk of closure without action from government

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Closure of the industry would deliver a devastating blow to the Northern Powerhouse; risking jobs, markets for British farmers and the UK’s renewables targets

Hull-based Vivergo Fuels, the UK’s largest producer of bioethanol, is warning that the UK’s bioethanol industry, the jobs and the secure domestic market it has created for UK arable farmers are at risk, unless the Government backtracks on a recent recommendation.

Vivergo welcomes the Government’s recent proposal to increase renewables in transport, but it has major concerns around proposals to limit the amount of crops used to produce fuels such as ethanol via a so called ‘crop cap’. The Department for Transport recently proposed a low cap of 2% compared to a European standard of 7%, although it also consulted on as low as 0%.

Vivergo says that a crop cap of 2% or less would not only severely impact on the UK’s ability to effectively implement E10 – a greener fuel containing 10% bioethanol – but it could also lead to the closure of the industry. This would risk thousands of jobs throughout Vivergo’s supply chain, affect the livelihoods of farmers that sell feed wheat for its production and buy its co-produced protein-rich animal feed, and prevent the UK from meeting its legally binding environmental targets.

Mark Chesworth, Managing Director at Vivergo Fuels, said: “As the UK’s biggest wheat buyer, we offer a 365-day demand for the UK’s arable farmers – providing a new sales channel, often giving more competitive rates for their feed-wheat in comparison to exporting. But the Government risks severely hampering the industry if it moves towards a low crop cap.

“The Government’s proposed crop cap would be a major own goal, undermining the Modern Industrial Strategy, which aims to cultivate world-leading sectors, develop skills, encourage trade and inward investment policy, and deliver affordable energy and clean growth. All of which the bioethanol industry in the UK is already delivering.

“It would also deliver a devastating blow to the Northern Powerhouse at a time of real economic uncertainty, particularly against the backdrop of Brexit. As one of the Government’s Northern Powerhouse Partners, and during Hull’s City of Culture Year, it would be disastrous for the Government to see companies such as Vivergo, and as a direct consequence, the wider region, suffer.

“We are calling for a 7% crop cap. The Government needs to act and reconsider its proposals to prove its commitment to the Industrial strategy and the Northern Powerhouse whilst delivering a significant boost to an industry that can deliver growth, jobs, investment and innovation. It will also enable E10 to be effectively rolled out, providing Government with the quickest, easiest and most cost effective solution to decarbonise transport and meet the UK’s challenging targets.

Vivergo Fuels is the UK’s largest producer of bioethanol and high protein animal feed (a co-product of bioethanol production). It represents a £350m investment into the Humber region, directly employing close to 150 people at its Saltend plant and Hessle head office, and creating thousands more jobs throughout its supply chain.

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