The Vivergo Fuels bioethanol plant at Saltend will cease production by mid-September unless the Government intervenes, the company has announced.
The firm emphasised “the strategic importance of a domestic ethanol supply” and stated that the Government has pledged to engage in formal discussions to find a “sustainable solution” amid concerns over the impact of the UK’s trade deal with the US.
However, due to the uncertain circumstances, the firm, owned by Associated British Foods (ABF), announced on Thursday that it is simultaneously starting a consultation with its staff to wind down the plant, which employs more than 160 people.
The Government said Vivergo’s announcement was “disappointing”, as it has just begun negotiations about financial support this week.
In a statement, the firm said: “Unless the Government is able to provide both short-term funding of Vivergo’s losses and a longer-term solution, we intend to close the plant once the consultation process has completed and the business has fulfilled its contractual obligations.
“We would cease all manufacturing before the end of our financial year on September 13, 2025.”
The statement added: “In our interim results announcement on April 29, 2025, we stated that the commercial viability of Vivergo, our bioethanol business, was being undermined by the way in which the UK Government was applying regulations to imported ethanol.
“Since then, the situation has been made significantly worse by the UK’s trade deal with the US, which will allow tariff-free US ethanol into the UK.
“ABF has engaged in extensive discussions with the Government to find a financial and regulatory solution that would enable Vivergo to operate on a profitable and sustainable basis.
“Yesterday, our extended deadline for the Government to deliver that solution passed.”
Last month, Vivergo alerted wheat farmers supplying it of a potential closure without swift government action.
The company described the removal of a 19 per cent tariff on US ethanol imports as the “final blow”. The bioethanol sector believes that the US trade deal renders it unable to compete with heavily subsidised American products.
Vivergo says that its Saltend facility is capable of producing up to 420 million litres of bioethanol from wheat grown by thousands of UK farms.
It described bioethanol production as “a key national strategic asset” which helps reduce emissions from petrol and is expected to be a key component in sustainable aircraft fuel in the future.
The plant is the largest single production site for animal feed in the UK, while the company estimates it indirectly supports about 4,000 jobs across the Humber region and Lincolnshire.
Leading figures from across the political spectrum in the Hull and East Yorkshire area have warned of the impact the plant’s closure could have on the region.
A Government spokesperson said: “We recognise this is a concerning time for workers and their families and it is disappointing to see this announcement after we entered into negotiations with the company on financial support yesterday.
“We will continue to take proactive steps to address the long-standing challenges the company faces and remain committed to working closely with them throughout this period to present a plan for a way forward that protects supply chains, jobs and livelihoods.”
The Government acknowledged that the bioethanol sector has experienced considerable difficulties for a while and highlighted that officials and ministers have been in talks with Ensus and Vivergo over the past few months to address the challenges.
On June 10, the business and transport secretaries met with industry representatives. Pledging continued engagement, the Government confirmed an ongoing dialogue with the firms “will continue at pace” coupled with efforts to find viable solutions, which includes seeking guidance from external consultants.