Britain Has 12 Days to Save Bioethanol Industry, Says AB Foods

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June 04, 2025

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by James Davey (Reuters) Industry warns last month's UK-US trade deal will hit operations; Seeks short-term financial aid of up to 150 million pounds; Says thousands of jobs at stake

LONDON, June 3 (Reuters) - One of Britain's biggest bioethanol producers warned the government on Tuesday that unless it steps in with a support package for the industry within the next 12 days it will have to start closure processes at its plant.

ABF Sugar, part of Associated British Foods (ABF.L) and Ensus together account for nearly all of the UK’s bioethanol production capacity.

"We have 12 days to save this industry," Paul Kenward, CEO of ABF Sugar, told lawmakers on parliament's Business and Trade Committee.

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ABF Sugar and Ensus have warned that last month's U.S.-UK trade deal, which will see the UK's 19% tariffs on U.S. ethanol fall to zero, on top of existing regulations giving overseas producers an advantage in the British market, have made the operating environment impossible.

They have said their plants at Hull and Teesside in northern England face closure.

Along with supply chain partners, the plants support thousands of jobs.

Kenward told lawmakers that by June 15 he needed to tell farmers whether he could sign new contracts for wheat supply.

"Why would I do that unless I have some confidence that the government's going to step in?" he said.

Kenward called on the government to urgently level the regulatory playing field, increase the amount of ethanol in UK petrol from 10% to 15% and support the development of sustainable aviation fuel.

He also wants the industry to have access to short-term financial aid of up to 150 million pounds ($203 million).

Kenward said AB Foods had invested 700 million pounds in the Hull site.

“Once it goes, it goes. Think what that does to future investors in green industries," he said.

A government spokesperson said business minister Jonathan Reynolds had met members of the bioethanol sector and senior officials "continue to consider what options may be available to support the impacted companies". READ MORE

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Excerpt from BBC: Ensus, which runs the Redcar plant, said the recent UK-US tariff deal "fundamentally undermined its business position", as it removed a 19% tariff on US ethanol imports.

The firm's chairman Grant Pearson said the government needed to come up with a "urgent" solution to save skilled jobs in the region.

A Department for Business and Trade (DBT) spokesperson said it was working closely with the bioethanol industry to understand the impacts of the deal.

The company's warning follows a similar announcement made by Associated British Foods (ABF), which operates the only other bioethanol plant in the UK.

It said the new deal, which is still being worked on, was the "final blow" to its Vivergo Fuels Site at Saltend, near Hull.

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Ensus's Redcar plant sources feed grain from farms in the UK and Europe to produce about 400 million litres (88 million gallons) of bioethanol each year.

It also sells the byproducts from this process, such as high protein animal feed, to farmers.

The firm said it employed more than 100 people at the plant and that it supported a wider supply chain of about 3,000 people in northern England.

It is understood the influx of US produced bioethanol into the UK would severely undercut Ensus and ABF's businesses.

Mr Pearson said the loss of the Teesside plant would also mean a "catastrophic knock-on effect in other vital sectors of the economy".

The UK is already the second-highest destination for US ethanol exports, according to US ethanol lobby group Renewable Fuels Association. READ MORE