Britain’s bioethanol industry is on the brink of collapse as a direct result of Britain’s trade deal with President Trump, industry leaders have warned.
Thousands of green jobs in the northeast and Yorkshire are said to be at risk because of giveaways in the pact signed with Washington last week.
One of Starmer’s concessions to Trump was the reduction of British tariffs on US ethanol from 19 per cent to zero. The agreed 1.4 billion litre quota far outstripped the amount exported by the US to Britain last year.
However, Starmer was warned that sacrificing bioethanol tariffs could lead to the closure of the two largest plants making the fuel, which is blended into petrol to reduce emissions.
Paul Kenward, the chief executive of ABF Sugar, and Grant Pearson, the chairman of Ensus, said that hundreds of jobs were directly at risk, together with thousands more in supply chains.
The two companies represent nearly all of the UK’s bioethanol production capacity, and operate the two largest facilities in the country — in Salt End, East Yorkshire, and in Wilton, Teesside.
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Kenward and Pearson praised the prime minister for showing “real leadership” in delivering relief for Britain’s car and steel industries.
However, they said: “For another strategically essential sector — domestic bioethanol production — it is now clear that the deal has triggered an existential threat. Without immediate action, this vital sovereign capability will be lost.”
They said that their operating environment was now impossible, given the additional regulations that gave overseas producers an unfair advantage in the British market.
Mass collection and production of corn for ethanol in Iowa
RENE CLEMENT/POLARIS/EYEVINE
Kenward and Pearson told The Times: “We are fast approaching the point where we need to decide whether to sign new contracts. In the current conditions, that would be irresponsible.
“Hundreds of growers will lose a dependable market for wheat that cannot be used in breadmaking. Instead, they’ll be forced to export it at lower prices, while facing higher costs for imported animal feed.
“Without urgent government action, the UK’s bioethanol industry will simply vanish, leaving the country dependent on imported ethanol — while also losing significant domestic production of carbon dioxide and high-protein animal feed.”
Carbon dioxide and dried grains, which are used in animal feed, are by-products of the bioethanol production process.
Kenward and Pearson added: “CO₂ is indispensable across the economy — from its importance to the NHS for its operating theatres to cooling nuclear reactors. For the food and drink sector, it is used for everything from preserving packaged food to carbonating drinks.”
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The closure of both bioethanol production sites could also harm Britain’s net zero drive by reducing possible sources of production of sustainable aviation fuel, Kenward and Pearson said. “The UK is on the verge of turning its back. Our recent discussions with ministers offered hope of fixing the regulatory imbalance that’s undermining the industry.
“The trade deal, as it stands, will reverse that progress — and more. We’re not asking for special treatment — only fair rules, stable policy, and, importantly, recognition of the strategic value sovereign bioethanol production brings to the UK.”
Starmer was urged to “move quickly to protect what it puts at risk” and not sacrifice the bioethanol industry “for a deal that solves one problem by creating another”.
Ensus’s plant on Teesside has been operating for 15 years and buys more than a million tonnes of wheat a year from UK farmers to produce about 400 million litres of ethanol.
The Ensus UK chemical plant at Wilton, Teesside
ALAMY
It also makes about 350,000 tonnes of high-protein animal feed and 250,000 tonnes of carbon dioxide. About 2,000 people are employed across its supply chain.
Vivergo, a subsidiary of ABF Sugar which employs about 150 people, can produce up to 420 million litres of bioethanol and 400,000 tonnes of animal feed a year.
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After the trade deal was announced, Starmer’s deputy spokesman said the government had met representatives from the affected companies and close engagement would continue.
The prime minister heralded a “fantastic, historic day” after the trade deal was announced.
He said: “This is jobs saved, jobs won but not job done and our teams will continue to work to build on this agreement.
American producers of bioethanol will have a 1.4 billion litre quota for exports to Britain under the new deal
SCIENCE PHOTO LIBRARY
“My government is determined to go further and faster to strengthen the UK’s economy, putting more money in working people’s pockets as part of our plan for change.”
A government spokesperson said: “This government signed a deal with the US in the national interest to secure thousands of jobs across key sectors — from the auto industry to steel — and lay the groundwork for greater trade in the future.
“We are meeting with leaders from all sectors, including ethanol producers, to discuss the impacts of this deal.”
Senior government figures met with both ABF and Enus last week. The vast majority of UK arable production is for food and animal feed. Less than 1 per cent of arable land is used for biofuel production.
