Latest news with #bioethanol
Reuters
a day ago
- Business
- Reuters
Uganda to start blending ethanol with petrol from January
KAMPALA, July 1 (Reuters) - Uganda will require fuel distributors to blend locally produced ethanol into all petrol sold in the country starting next January, the energy ministry said on Tuesday, a measure that could reduce the East African nation's petroleum import bill. Uganda imports about $2 billion worth of petroleum products annually. It handed over exclusive rights for the supply of all such products to a unit of global energy trader Vitol in 2023. The blending programme is also part of government policy to promote clean energy, the ministry said in a statement, as bioethanol can help in efforts to reduce carbon emissions. Ethanol is mostly made from molasses, a byproduct of sugar production. Fuel dealers will initially be required to blend 5% ethanol into all petrol sold, but the ministry said it would gradually increase the ratio to 20% "on the basis of availability of supply". Landlocked Uganda expects to start pumping commercial volumes of crude oil next year, hoping to export it via a pipeline to a port on Tanzania's Indian Ocean coastline.
The National
3 days ago
- Automotive
- The National
UK-US trade deal kicks into gear with tariffs slashed for UK car and aerospace sectors
A trade deal that reduces tariffs on British exports of cars and aerospace equipment to the US has come into force as the two sides continue to negotiate over steel duties. London and Washington reached an agreement in May to cut US tariffs on cars from 27.5 per cent to 10 per cent, with a limit of 100,000 vehicles a year. It also fully eliminated a 10 per cent tariff on goods such as engines and aircraft parts. The deal was clinched after US President Donald Trump imposed import taxes as part of his 'liberation day' tariffs on countries across the world. 'From today, British car and aerospace manufacturers will benefit from major tariff reductions when exporting to the US, saving thousands of jobs,' the UK Department of Trade said in a statement on Monday. Prime Minister Keir Starmer said the 'historic trade deal' delivers for British businesses and protects UK jobs. 'From today, our world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to our economy.' In return, Britain agreed to further open its market to US ethanol and beef. The UK government is due to update Parliament on Monday on those sectors. The bioethanol industry says the deal has made it impossible to compete with heavily subsidised American products. The UK's largest bioethanol plant warned last week that it could be weeks from stopping production. Hull-based Vivergo Fuels said the start of talks with the government was a 'positive signal' but that it was simultaneously beginning consultation with staff to wind down the plant. It has also raised concerns in the chemical industry and among British farmers, even though the meat would still have to meet UK food safety standards. Mr Starmer and Mr Trumo finalised the deal for those sectors at the G7 summit, but levies on steel have been left at 25 per cent rather than falling to zero as originally agreed. Talks are continuing to secure 0 per cent tariffs on core steel products from the UK. The executive order signed by Mr Trump suggests the US wants assurances on the supply chains for UK Steel intended for export, as well as on the 'nature of ownership' of production facilities. 'We will continue go further and make progress towards zero per cent tariffs on core steel products,' the trade department said in the statement. Business and Trade Secretary Jonathan Reynolds said the deal would save hundreds of millions each year and safeguard thousands of jobs. Kevin Craven, head of aerospace trade association ADS, said the sector 'hugely appreciated' the efforts to reach a deal. Society of Motor Manufacturers and Traders chief executive Mike Hawes said the agreement was 'good news for US customers and a huge relief for the UK automotive companies that export to this critically important market'. This deal is one of several international agreements the UK has secured recently, including a trade deal with India and a renewed EU deal. Negotiations are also continuing for a GCC-UK trade deal. The two sides are 'hard at work' on bringing the deal into place Britain's chief negotiator, Tom Wintle, said last week.
Telegraph
3 days ago
- Business
- Telegraph
Another fake Net Zero market that nobody wanted is set to collapse
This week came news that UK bioethanol producer Vivergo Fuels is once again on the brink of closure – this time as a result of the UK's trade deal with the US, which removes tariffs on cheaper American bioethanol imports. Its rival, Ensus UK, faces a similarly uncertain future. Vivergo produces enough bioethanol to supply about 30 per cent of the UK's bioethanol needs for low carbon road fuels. Government rules require a percentage of bioethanol to be blended into petrol before it can be sold in order to reduce the carbon dioxide emissions associated with transport – considered to be one of the hardest to abate sectors. This is not the first time that Vivergo has faced closure. Back in 2018 it shut down for four months due to uncertainty over government support. It only reopened when the Government created a subsidy scheme known as the Renewable Transport Fuel Obligation (RTFO), which forces fuel suppliers to sell renewable fuels. Bioethanol producers earn RTFO certificates, which they sell to fuel suppliers to help them meet their quotas. And that's the heart of the issue: the UK bioethanol industry wasn't created to meet any actual consumer demand – it exists to satisfy a policy target: the use of green fuel in transport. Now it faces extinction thanks to a different policy priority: that of securing an advantageous trade deal with the US. American bioethanol is cheaper to produce. If it now enters the UK tariff-free, it will almost certainly displace UK-made bioethanol. But once the emissions from transatlantic shipping are factored in, much of the carbon benefit from the RTFO is wiped out. In 2023, the UK as a whole emitted 375 million tonnes of greenhouse gases, about 0.7 per cent of global emissions. Road transport accounted for roughly 100 million tonnes. Using UK bioethanol cuts transport emissions by around 82 per cent, but switching to US imports halves those savings. The impact on global emissions? Negligible – effectively defeating the purpose of the policy. This is a textbook example of how net zero policies can create artificial markets that collapse as soon as political winds shift. Bioethanol was never commercially viable on its own, it was simply created to tick a box. And now, it's likely to be sacrificed for the greater prize of trade access – a goal with arguably broader economic value to the nation. There's no easy compromise here. If the UK wants its trade deal with the US, it's unlikely to be allowed to impose carbon border taxes or other constraints on US ethanol without breaching the deal. But any industry that only survives because overseas competitors are excluded isn't genuinely viable. Unless there's a clear national interest – such as energy security – consumers shouldn't be forced to pay higher prices to prop up policy experiments. The public didn't ask for biofuels, they were pushed into using them by renewable fuels mandates. And now the protections that insulated the UK bioethanol industry from international competition are being lifted, the future looks bleak for the sector. But then, the emissions savings were so paltry on a global scale that it's difficult to see the point of the complex system of mandates, certificates and subsidies that prop it all up. Worse still, both Vivergo and Ensus run on wheat, and together consume up to 15 per cent of UK wheat production when operating at full capacity. Their closure would deliver another blow to a farming sector already reeling from successive policy missteps. This is a cautionary tale. When governments create fake markets, they distort industries, misallocate capital, and raise consumer costs – all for gains that may prove illusory. There are very good reasons why we don't have a centrally planned economy, and it's time ministers stopped pretending we do.
Yahoo
6 days ago
- Business
- Yahoo
AB Foods' bioethanol plant set to be early victim of US-UK trade deal
By James Davey (Reuters) -Associated British Foods said it would close the UK's largest bioethanol plant by September if the government does not provide support and funding, potentially the first victim of Britain's tariff deal with U.S. President Donald Trump. Under last month's trade deal, 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. The possible closure would be an embarrassment for Prime Minister Keir Starmer who hailed the trade deal as a boost to businesses that would protect jobs and attract investment. It also underscores how Trump's assault on trade is being felt around the world, with the closure set to affect the production of byproducts including animal feed and carbon dioxide, and British arable farmers which supply the industry. Bioethanol is produced from crops such as wheat and is used to make petrol greener and to make sustainable aviation fuel. On Monday, Starmer's government launched its industrial strategy, promising to invest in the green economy. Britain has two major bioethanol plants in northern England - AB Foods' Vivergo plant and one operated by Ensus, owned by Germany's Sudzucker Group - which account for nearly all of the UK's production capacity. They have warned that the trade deal, along with existing regulations that give U.S. producers an advantage in the British market, has made the environment impossible. The industry supports thousands of jobs. Ensus, which has warned its Teesside plant also faces imminent closure, on Thursday welcomed the appointment of external advisers to work with the industry, and said it would work with the government "urgently". LEVEL THE REGULATORY PLAYING FIELD AB Foods said on Thursday it would begin consultations with employees for an orderly wind-down of its plant, while simultaneously continuing talks with the government, which it said is now committed to reaching "a sustainable solution". It said it would cease all manufacturing before September 13, its financial year-end, "unless the government is able to provide both short-term funding of Vivergo's losses and a longer-term solution." A spokesperson for the government said it was disappointed with AB Foods' announcement, having entered into negotiations with the company on financial support on Wednesday. The government would "present a plan for a way forward that protects supply chains, jobs and livelihoods," the spokesperson added. AB Foods wants the government to increase the amount of ethanol in UK petrol from 10% to 15% and support the development of sustainable aviation fuel. It also wants the industry to have access to short-term financial aid of up to 150 million pounds ($202 million). Britain's concession on ethanol was made in return for the removal of 25% additional tariffs on steel and aluminium, and a quota of 100,000 cars at a duty of 10%. Sign in to access your portfolio
The Independent
6 days ago
- Business
- The Independent
Under-threat bioethanol plant says talks with Government a ‘positive signal'
The UK's largest bioethanol plant, which has said it could be weeks from stopping production following the recent US trade deal, has described the start of negotiations with the Government as a 'very positive signal'. Hull-based Vivergo Fuels said on Thursday that, given 'the strategic importance of a domestic ethanol supply', the Government has committed to formal negotiations to reach a 'sustainable solution'. But the firm, which is owned by Associated British Foods (ABF), said it is simultaneously 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. An ABF spokesperson said: 'We are extremely pleased to be entering the next phase of formal negotiations with Government over the future of Vivergo. 'We believe it is a very positive signal that Government recognises the strategic importance of a domestic bioethanol industry, and is serious about working with the sector to find a sustainable long-term future. 'We look forward to engaging intensively and constructively with ministers over the coming weeks.' The statement added: 'ABF cannot continue to absorb losses at the plant. That is why a timely solution is vital. 'Our clear preference is to find that solution through this process and to get back to running a business that can thrive in the long term.' The firm said that 'in parallel' it has entered into a consultation process with staff, which it said was a necessary step as there is no guarantee that the negotiations with Government will be successful. It said: 'Our employees are our most important consideration, and we will engage with them properly and transparently about the future. 'Consultation is not a fixed outcome, and closure is not a certainty. 'The outcome depends on the progress we are able to make through negotiations with the Government.' Last month, Vivergo wrote to the wheat farmers who supply it, telling them it will have to close unless there is quick Government intervention. It said the removal of a 19% tariff on US ethanol imports, which formed part of the recent UK-US trade deal, was the 'final blow'. The bioethanol industry says the deal has made it impossible to compete with heavily subsidised American products. Vivergo said the Hull plant can produce up to 420 million litres of bioethanol from wheat sourced from 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 firm said it has just signed a £1.25 billion memorandum of understanding with Meld Energy to anchor a 'world-class' Sustainable Aviation Fuel facility at the site. It said the 'potential ahead is enormous', adding that 'there is a real opportunity for Hull to be home to one of Britain's most exciting clean fuel clusters'. The plant is also the UK's largest single production site for animal feed and the company says it indirectly supports about 4,000 jobs in the Humber and Lincolnshire region. Following ABF's announcement of a potential shutdown by mid-September, a Government spokesperson said on Thursday: '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 said the bioethanol industry has been facing significant challenges for some time and officials and ministers have met with Ensus and Vivergo consistently over the last few months to address the challenges. It said both the business and transport secretaries met representatives from the industry on June 10 and engagement with the companies 'will continue at pace' to assess potential solutions, with the help of external consultants.
