In another blow to the UK’s industrial infrastructure, the country’s largest bioethanol plant will begin closing down operations, after the government decided not to offer the sector a rescue package. 160 jobs are set to be lost at Vivergo, a subsidiary of Associated British Foods, despite warnings that the would close without government support. AB Foods has highlighted the May UK-US trade deal as a key factor, removing a 19% tariff on US-imported ethanol.
A government spokesman said: ‘Direct funding would not provide value for the UK taxpayer or solve the long-term problems of the bioethanol industry. This government will always take decisions in the national interest. That’s why we negotiated a landmark deal with the US which protected hundreds of thousands of jobs in sectors like auto and aerospace. We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade, and have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces. We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process. We also continue to work up proposals that ensure the resilience of our CO2 supply in the long-term in consultation with the sector.’
AB Foods said it had been in talks with the government over the last few months and had presented a plan to return the firm to profitability: ‘In making this decision, the government has thrown away billions in potential growth in the Humber, a sovereign capability in clean fuels that had the chance to lead the world. This plant should always have been profitable under the right regulatory environment, as similar plants in western Europe demonstrate.’
