Associated British Foods (ABF) has issued a warning that its Vivergo Fuels bioethanol plant in Hull may soon be forced to shut down due to the recent US-UK trade deal. The agreement, which eliminates the 19% import tariff on US ethanol, threatens to flood the UK market with subsidised American bioethanol and undermine domestic production.
“The US–UK trade deal was a great achievement. However, it has created huge uncertainty for the UK’s strategically vital bioethanol industry,” ABF said in a statement. “We cannot now make the wheat purchases we planned for July. And no wheat purchases would mean our plant closing.”
Ben Hackett, Managing Director of Vivergo Fuels, added: “This trade deal is the final blow. If support is not announced soon, we will have no choice but to begin the closure process within weeks.”
million tonnes of UK-grown wheat each year, supplying 420 million litres of ethanol to fuel blenders under the UK’s E10 mandate. The same facility produces more than 500,000 tonnes of high-protein animal feed for British livestock and delivers industrial CO₂ — used by food processors, brewers, and even the NHS.
A Strategic Supply Chain in Crisis
The Vivergo facility is no ordinary bio plant. It refines over 1.1 million tonnes of UK-grown wheat each year, supplying 420 million litres of ethanol to fuel blenders under the UK’s E10 mandate. The same facility produces more than 500,000 tonnes of high-protein animal feed for British livestock and delivers industrial CO₂ — used by food processors, brewers, and even the NHS.
“This is not just about transport fuel,” said Hackett. “We underpin food-grade CO₂, winter cattle feed, and we’re essential for the UK’s plans for sustainable aviation fuel. If we close, that capability vanishes.”
The concern stems from a clause in the new bilateral trade agreement that removes the 19% import tariff on US bioethanol. The deal allows up to 1.4 billion litres of US-subsidised corn ethanol to enter the UK duty-free — a quantity roughly equal to the entire British market.
ABF says this would make domestic production economically unviable almost overnight.
“If Vivergo closes again, it would be a step back to 2018 when we shut the gates due to stalled E10 legislation. That history must not repeat,” said Hackett.
Farmers, Feed and Fuel at Stake
The consequences ripple far beyond Vivergo. More than 900 farms in Yorkshire and Lincolnshire supply wheat to the plant. If ABF cannot commit to contracts in July, UK farmers stand to lose over £200 million in annual income, while regional agricultural stability will take a major hit.
“We can’t afford to lose this buyer,” said a Lincolnshire wheat farmer who supplies Vivergo. “If they pull out, grain prices will collapse across the region.”
In the supply chain, over 4,000 jobs — from transport and grain handling to maintenance and CO₂ logistics — hang in the balance.
“Bioethanol refining is sovereign capability worth keeping,” ABF noted. “It provides high-grade fuels, supports CO₂ for the NHS, and delivers winter cattle feeds — all within our borders, ready to respond to a changing world.”
Industry Calls for Urgent Action
Insiders say the Hull facility is losing nearly £3 million per month in the current market. The Financial Times estimates that up to £75 million in short-term aid may be needed to keep the sector operational.
Alongside ABF, industry groups are calling on the UK Government to:
- Reinstate a fair import structure to avoid undercutting domestic supply
- Raise the ethanol blend mandate from E10 to E15 to absorb more local output
- Tighten sustainability rules to block misuse of renewable energy subsidies
- Establish transition support for plants deemed strategically critical
Some US firms — including ADM — are reportedly exploiting UK double-counting incentives to claim extra credits for corn ethanol, despite its non-waste origin. This creates a dangerous market distortion, according to multiple British producers.
E10, SAF and Energy Resilience
The UK’s shift to E10 petrol was meant to support low-carbon fuel and rural incomes. Now, those gains risk being reversed — with the government facing calls to accelerate the move to E15, a blend already common in Germany and the US.
Even more concerning is the impact on alcohol-to-jet fuel production. UK Sustainable Aviation Fuel (SAF) ambitions rely on domestic ethanol supply. Without plants like Vivergo, future SAF targets could fall flat.
Deadline: 25 June
The Vivergo team is now in active talks with the Department for Energy Security and Net Zero, as well as DEFRA and Treasury officials. However, the clock is ticking.
“We believe we can find solutions to keep our plants going,” ABF said. “We will thank this Government for that security of supply — should a future US President change their mind on exports and leave the UK with an acute shortage.”
A final decision is expected by 25 June 2025, the deadline for wheat procurement. Without clarity by then, Vivergo is expected to suspend operations.
What’s Next?
Industry Impact at a Glance:
- 420M litres ethanol/year — ~50% of UK supply
- 900+ farms impacted across Northern England
- £200M farming revenue at risk
- 4,000+ jobs in transport, logistics, CO₂, and feed
- Strategic SAF risk if ethanol base is lost
UK SAF Roadmap Overview
Image caption: Aerial view of Vivergo Fuels bioethanol plant in Hull, surrounded by wheat fields and nearby tanker ships. A key piece of the UK’s domestic energy puzzle now under threat.
Call to Action
Government decision-makers, retailers, and ethanol buyers must act now. To safeguard the UK’s agricultural economy, energy independence, and sustainability ambitions, immediate action is needed before 25 June.
