The UK government has a week to save up to 350 bioethanol jobs in Humber and Teesside, the boss of a fuel plant near Hull has warned.
Paul Kenward, the chief executive of ABF Sugar, said hundreds of jobs at the Vivergo Fuels plant at Saltend and the Ensus biorefinery on Teesside would be at risk if government fails to offer support that will enable the plants to survive the threat of US imports by the 25 of June.
Speaking on the BBC Radio 4 Today programme, Kenward said the UK has “given away the entire UK market for bioethanol” after agreeing a trade deal which removed tariffs on US biofuel.
He said ABF Sugar, part of the Associated British Foods group, would be forced to launch a consultation on redundancies on up to 200 “highly skilled” jobs at the Vivergo plant and that Ensus UK, owned by the German Südzucker Group, would do the same affecting 150 roles in Teesside if UK government ministers did not provide a plan for the firms, whose market is at risk of being wiped out by a deluge of tariff-free imports.
Previous to the recent US/UK trade deal, US biofuel imports faced import charges of 19%. Under new terms, this is reduced to zero for the first 1.4 billion litres that the UK buys which is about the current size of the UK market.
Both plants produce ethanol which is blended with petrol to produce more environmentally-friendly E10 fuel in the UK.
Between them the plants represent nearly all of the UK’s bioethanol production capacity.
Ensus’ plant in Redcar sources feedstock in the form of grain from farms in the UK and Europe which it uses to produce 400 million litres of bioethanol per year.
The £350 million Vivergo bioethanol plant in Hull was officially opened in 2013 with the capacity to produce 420m litres of bioethanol a year.
Kenward said he and Grant Pearson, the chairman of Ensus, has been in talks with ministers in recent weeks. Originally Kenward said they had “set a deadline” for government response by 15 June but that UK business and trade secretary Jonathan Reynolds and trade minister Douglas Alexander had asked for an extension of a week.
“We gave them two [weeks] but if we didn’t hear back from them by the 25th of June we will have to start a consultation process which may lead to redundancies.”
He said that this would involve up to 200 jobs at Vivergo and another 150 affected at Ensus.
He added: “A lot is at stake here, not just in the short term, but the long term.
“So bioethanol should be and has been, a very profitable sector. It was set up by successive governments to help decarbonise UK road fuel.”
He said the sector is not seeking a subsidy but instead is looking to government for “bridging support… until some simple common sense changes to regulation can be made.”
“What we need as investors is certainty that the government sees this as a strategic industry it should.
“The green industrial strategy should include the bioethanol industry. We’re a key building block for sustainable aviation fuel, for sustainable marine fuel to power the ships that carry goods across the oceans, for bioplastics. So the longer term demand is definitely there. We need that longer term demand, and we’ve been working with government really intensively over the last few weeks, giving them everything they need to understand the small regulatory changes that would make our industry sustainable.”
A Government spokesperson did not confirm if it plans to address concerns. In a statement, the spokesperson defended the trade deal.
“The deal agreed with the US will save thousands of jobs in the UK, and we will always act in the national interest.
“We are working closely with the ethanol industry to find a way forward – and the Business and Transport Secretaries met with representatives from the bioethanol industry last week to discuss their concerns.”
