Last wheat delivered to largest bioethanol plant under threat after trade deal
Vivergo Fuels, near Hull, has said it is facing closure within weeks following the decision to end the 19% tariff on American bioethanol imports as part of the recent UK-US trade deal.
The plant buys more than a million tonnes of British wheat each year from more than 4,000 farms and says it has purchased from 12,000 individual farms over the past decade.
Managing director Ben Hackett wrote to growers earlier this year explaining that the plant will only be able to honour existing contractual obligations for wheat purchases while uncertainty continues.
Mr Hackett said the last scheduled load arrived at the plant on Friday.
Last month, Vivergo, which is owned by Associated British Foods (ABF), said it is was beginning consultation with staff to wind down the plant, which employs more than 160 people, due to the uncertain situation – a process which could see production stop before September 13, if support is not provided.
It said Britain's two largest bioethanol producers – Vivergo and Ensus in Teesside – are now in urgent negotiations with the Government.
The firms say the UK-US trade deal and regulatory constraints on the industry have made it impossible to compete with heavily subsidised American products.
Mr Hackett said on Friday: 'We have a choice of going down a path of stagnation, decline, unemployment, economy shrinking, or we have a choice of going towards a path of investment, growth, prosperity, job creation, and that's why it's crucially important that the Government comes to a decision quickly, and comes to a decision in favour of supporting the UK bioethanol industry.'
Farmer Matt Pickering, of Pickering and Sons, near Gainsborough, Lincolnshire, sold the last load of wheat to Vivergo.
Mr Pickering said: 'We struggle with the quality of our land type, so we tend to go for out-and-out bulk volume shed fillers. Vivergo has been a fantastic home for us to sell feed wheat into.'
Mike Green, owner of haulage company AgHaul, who transported the last load to the plant, said: 'We're in the dark. We don't know where we're going.
'It's very uncertain, uncharted waters, and it's worrying as we've already seen a decline in work.'
The landmark came as Meld Energy said the uncertainty over the plant is putting its plans for a 'world-class' green jet fuel project on the Humber in jeopardy.
Earlier this year, Meld Energy signed a £1.25 billion agreement with Vivergo Fuels to anchor a Sustainable Aviation Fuel (SAF) facility at Saltend Chemicals Park in Hull.
Meld Energy chief executive and founder Chris Smith said: 'We're excited about the potential to bring our sustainable aviation fuel project to the Humber – one of the UK's most important industrial and energy hubs.
'But, for projects like ours to succeed and the flow of vital investment to be forthcoming, we need a strong and integrated low-carbon ecosystem.
'A bioethanol plant on site at Saltend is a critical part of that mix. Without it, we'd have to consider alternative locations overseas where that infrastructure is already in place.'
A Government spokesperson said: 'We recognise 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 last month.
'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 said officials and ministers have met with Vivergo and Ensus consistently over the last few months to discuss options to address 'significant challenges' that the bioethanol industry has been facing for some time.
It said engagement with the companies 'continues at pace' and external consultants have been brought in to help.
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