Bioethanol plant faces closure without government support (Image: PA media)
Farmers have warned that parts of their sector will be “destroyed” if the Government fails to save the country’s biggest bioethanol plant. The Vivergo Fuels plant, in Hull, accepted its final lorry load of wheat at the beginning of August.
The crisis has stemmed from the signing of the US-UK trade deal, which opened the domestic bioethanol market to cheaper US imports that undercuts domestic producers. Save British Farming’s Liz Webster said: “If the Government allows the British bioethanol industry to close then farms will be destroyed. When farms fail, Britain’s food security is put at risk.
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“There is no alternative market for this wheat, not because the crop is wrong, but because the post-Brexit system has failed to support British agriculture. It’s wanton destruction. We should be investing in British fuel made from British wheat, supporting British farms. Instead, we’re watching the dismantling of our rural economy and sovereignty in real time.”
Business Secretary Jonathan Reynolds must decide this week whether to bail out the business, based in the East Riding of Yorkshire, after receiving a government-commissioned report from crisis consultants earlier this month.
Read more: UK drivers at risk of 'paying the price' over Keir Starmer's huge trade move
Sir Keir Starmer agreed to let American companies ship 1.4 billion litres of ethanol to Britain each year, free of tariffs, under the US-UK trade deal.
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It is understood that the Vivergo plant is running at a ￡3 million-a-month loss.
Angela Kirkwood, East Yorkshire farmer, said: “The closure of Vivergo is a serious setback for farming in East Yorkshire. It has been a key trading partner for the agricultural economy, supporting arable farmers through the purchasing of wheat and livestock producers alike by supplying high-protein animal feed.
“Its loss will hit the industry hard, reducing market options and driving down crop prices at a time when margins are already tight and overheads are high. We urgently ask the Government for their support and swift action to protect vital infrastructure like this.”
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Robert Sheasby, chief executive of the Agricultural Industries Confederation, called it “disappointing” that a solution has not been found.
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He added: In addition to the direct risk to jobs and the reduced demand for UK-grown wheat, we must also not overlook the loss of 600,000 tonnes of domestically produced animal feed and additionally lost carbon dioxide production.
“British arable farmers rely on a diverse consumer base to maintain a competitive sector. AIC Members who purchase wheat from farmers will now need to find new markets for displaced grain, which represents approximately 7% of this year’s projected wheat harvest.”
A Government spokesman said: "We know this is a concerning time for workers and their families which is why we entered into formal discussions with the company on potential financial support in June.
“We have engaged with the company and industry extensively since then. We will continue to take proactive steps to address the long-standing challenges it faces and remain committed to a way forward that protects supply chains, jobs and livelihoods.”
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