The Government says a deal to rescue the bioethanol industry ‘would not provide value for the taxpayer’ in a decision Vivergo’s owner says is ‘deeply regrettable’
The Government has made the “difficult” choice to not offer a rescue package to help save the UK’s bioethanol industry, which includes Saltend-based Vivergo Fuels, saying it “will always take decisions in the national interest”. Vivergo is the UK’s largest bioethanol producer, and has been campaigning for months, hoping to secure Government backing amidst closure fears.
The UK’s bioethanol industry was sent into crisis as result of the US-UK trade deal which removed the 19 per cent tariff on ethanol imports from the United States. Domestic firms warned that, without the tariff, they would be unable to compete with the US imports potentially leading to the collapse of the industry in the UK.
In recent months, Vivergo’s campaign has been backed by local politicians, of all political persuasions, and it has also teamed up with the other companies at Saltend Chemicals Park, near Hull, in calling for intervention. Owners of the chemicals park, px, said that because the site works as an integrated cluster, the loss of Vivergo would be felt by all the companies there.
After months of negotiations, the government’s Department for Business and Trade (DBT) has confirmed its decision to not intervene and directly fund UK-based bioethanol firms including Vivergo. A Government spokesperson said: “This Government will always take decisions in the national interest. That’s why we negotiated a landmark deal with the US which protected hundreds of thousands of jobs in sectors like auto and aerospace.
“We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade, and have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces. We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process.
“We also continue to work up proposals that ensure the resilience of our CO2 supply in the long-term in consultation with the sector.” The DBT also say the US deal as a whole works in the national interest and backs industries that employ around 320,000 people in the UK while Vivergo Fuels and Ensus (the other major bioethanol firm) together directly employ fewer than 300 people.
A spokesperson for Associated British Foods, who own Vivergo, responded saying: “It is deeply regrettable that the Government has chosen not to support a key national asset. We have been fighting for months to keep this plant open. We initiated and led talks with Government in good faith. We presented a clear plan to restore Vivergo to profitability within two years under policy levers already aligned with the Government’s own green industrial strategy.
“In making this decision, the Government has thrown away billions in potential growth in the Humber and a sovereign capability in clean fuels that had the chance to lead the world. Hugely significant investment was lined up to go into the area, from ABF and other companies. Jobs in clean energy will now move overseas – principally to the US but also to other countries with a more sensible regulatory environment.
“This plant should always have been profitable under the right regulatory environment, as similar plants in Western Europe demonstrate. The Government’s own commissioned analysis spells out that Vivergo could and should be profitable under that environment.
“The loss of Vivergo will be felt most acutely by our dedicated workforce and their families and by the thousands whose livelihoods depend on our supply chain – from farmers to hauliers and engineers. We are hugely disappointed, on their behalf, that the press was informed of this decision before we were told – and before we had a chance to communicate to our staff. Our focus is now on supporting the working people at our plant in Hull.”