The head of a Humber bioethanol plant has said it has received two pieces of “great news” as it tries to avoid the threat of closure.
Hull-based Vivergo Fuels has warned that it might have to close after the recently-signed Ƶ-US trade deal removed restrictions of imports on bioethanol, which can be used as an additive to petrol to make it less polluting.
The firm, which is owned by Associated British Foods (ABF), has welcomed Government talks on its future but also said it would begin consultation with staff to wind down the plant, which employs more than 160 people, due to the uncertain situation. The consultation is set to open tomorrow and could see production stop before September 13 if support is not provided.
Speaking on the Radio 4 Today programme, Vivergo Fuels managing director Ben Hackett said progress had been made in talks with the Government, while the company had also received a commercial boost with interest in a major deal for the plant. He said it would be a mistake for the Ƶ to rely on imports of bioethanol from other countries as demand for the fuel was increasing in many other parts of the world.
Mr Hackett said: “We’ve had some great news in terms of working with the Government. The Government has named some advisors to work with us to negotiate a rescue package, so that’s great news.
“On top of that, we recently signed a memorandum of understanding with a very well-financed company who are looking to spend up to a £1bn with Vivergo at the centre of that green industrial revolution. So they’re really great news and reinforce the value that the Ƶ bioethanol industry and Vivergo specifically can bring to the Ƶ.”
In May, Vivergo wrote to the wheat farmers who supply it, telling them it will have to close unless there was Government intervention. It said the removal of a 19% tariff on US ethanol imports, which formed part of the recent Ƶ-US trade deal, was the “final blow”.
The bioethanol industry- which also includes the Ensus plant at Teesside - says the deal has made it impossible to compete with heavily subsidised American products. Vivergo said the Hull plant can produce up to 420m litres of bioethanol from wheat sourced from thousands of Ƶ farms, making it a “key national strategic asset”.
Mr Hackett said the Department for Transport had to help the firm by “putting in place a regulatory environment that supports the British bioethanol industry”. He said the firm had no choice but to start consultation on redundancies in parallel with the rescue talks due to uncertainty over its future.
He said it was a “short-term view” for the Ƶ to rely on imported bioethanol as many other countries increased demand for the fuel
