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BBC News
26-06-2025
- Business
- BBC News
Food giant threatens to close UK biofuel plant after US tariff deal
Associated British Foods has threatened to close one of the UK's two bioethanol plants if it does not receive state support after the government struck a tariff deal with the US. It said while the government has committed to "formal negotiations", it will begin consultations with 150 staff at its Vivergo bioethanol business in Hull "to effect an orderly wind-down". As part of an agreement to cut US tariffs, the government said it will remove a 19% tariff on exports of ethanol to the UK, and replace it with a tax-free quota of up to 1.4 billion litres of the fuel. AB Foods said unless help is provided, Vivergo will stop manufacturing before 13 September. The Vivergo bioethanol plant is the UK's biggest. The only other plant making the fuel in the UK is Ensus in Teesside, which is owned by Germany's Sudzucker Group. Ensus has also said it may have to shut its site because the UK-US trade agreement "fundamentally undermined its business position".Under the tariff deal, the US can export 1.4 billion litres of the fuel - equal to the UK's entire ethanol market - duty free, which means businesses in Britain do not have to pay tax if they buy the American fuel. In return, the government secured tariff cuts on UK exports to the Foods set a deadline of 25 June to reach an agreement with the government about support. "Yesterday, our extended deadline for the government to deliver that solution passed," the company talks are continuing, AB Foods 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."
Reuters
26-06-2025
- Business
- Reuters
AB Foods set to close bioethanol plant after US-UK trade deal
June 26 (Reuters) - Associated British Foods said it would close its bioethanol plant in northern England if the government does not provide the funding to alleviate the impact of the U.S.-UK trade by the time its consultation process for a wind down is complete. The group said it would begin consultation with employees to effect an orderly wind-down immediately, while continuing to negotiate with the government. Under the trade deal agreed with U.S. President Donald Trump, the UK's 19% tariffs on U.S. ethanol will fall to zero, through a 1.4 billion-litre (370 million gallon) quota - a figure equating to the size of the UK's entire ethanol market today. AB Foods (ABF.L), opens new tab, which owns the Vivergo plant in Hull, and Ensus, which is owned by Germany's Sudzucker Group and operates a bioethanol plant in Teesside in Northern England, have warned that the deal, along with existing regulations that give U.S. producers an advantage in the British market, has made the operating environment impossible. "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," AB Foods said.
