Alan Johnson: Hull, a proud city where the economic tide is turning thanks to green energy

Alan Johnson.

Alan Johnson.

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THERE is a huge feeling of optimism within Hull at present as we gear up to become the 2017 UK City of Culture and continue to hit the headlines for the right reasons, including substantial investment in Hull by a host of major companies.

It is evident that the city will continue to be in the spotlight and it is my firm belief that it is not only in the UK where audiences will be wowed by the exciting programme of events that the City of Culture team and its partners have put in place.

The success of Hull, and the wider sub region, is not a flash in the pan. The UK City of Culture programme will rightly play on Hull’s history and excellence in the arts as well as its fishing heritage, but it will be focused on the future, not the past.

In the area of business and commerce, especially in the energy sector, I believe the region should take particular pride. But this is also a sector that demands focus, particularly during this period of uncertainty, as the UK’s vote to leave the European Union continues to trigger seismic changes, raising questions for many businesses and industries.

It is no idle boast to label Hull and the Humber as the UK’s energy estuary, an enviable position that has taken decades to build.

Quite simply, we’re a vital energy provider to the rest of the UK, home to some of the biggest and best green energy producers in the country, including Vivergo Fuels, Dong and Siemens. Not only are organisations such as these literally fuelling the rest of the country, but they’re also playing a vital role in supporting and rebalancing the economy through UK job creation and investment.

However, current uncertainty around how the Government intends to meet legally-binding climate change and carbon emissions reduction targets is only serving to slow growth in the green energy sector, with the EU referendum on June 23 further increasing this uncertainty.

This is concerning, not only to local politicians who have a passionate interest in the area, but also to business leaders, owners, investors, trade unions and the many thousands employed both directly and through the energy sector’s supply chain.

Take Saltend-based Vivergo Fuels as an example. It is the UK’s largest producer of the green fuel, bioethanol, producing enough to meet around half of the UK’s current demand.

Representing a £350m investment into the Humber region, Vivergo turns locally sourced, surplus non-feed grade wheat (not used for human consumption) that would normally be exported, into bioethanol – which is blended into unleaded petrol at a current level of five per cent – and highly nutritious animal feed, benefiting the environment, the economy, the agricultural sector and the food chain in the UK. In fact, at full production, Vivergo is the UK’s biggest single-source supplier of animal feed.

Operating the UK’s largest brewery – a stage in Vivergo’s production process – from its manufacturing base at the Saltend Chemicals Park, the company produces 420 million litres of bioethanol and 500,000 tonnes of animal feed per year.

Importantly for the Humber, Vivergo, which has its administrative headquarters in my constituency at Hessle, not only employs more than 100 highly skilled people in Hull, many recruited from the local area, but supports more than 3,000 jobs through its supply chain.

Graham Stuart, whose constituency covers the Saltend plant, and myself, have worked together with Vivergo helping it to navigate the changing political landscape. Having visited Vivergo Fuels on numerous occasions and spoken with its management and staff, we know the company is proud to support UK jobs, UK farmers, UK investment and UK fuel security as it delivers real growth to the Yorkshire and wider UK economy, saving money by reducing bioethanol and animal feed import requirements.

As the UK’s largest wheat delivery point, sourcing the majority from local farms within a 50-mile radius, Vivergo is boosting the fortunes of the agricultural sector in the process, while its bioethanol currently offers greenhouse gas savings of more than 50 per cent against standard petrol production, the equivalent to taking 180,000 cars off the road.

It is clear that the economic and environmental benefits are huge – but worryingly the wider bioethanol industry has practically been on hold since 2012. Ethanol blending levels in unleaded petrol have been capped at 4.75 per cent, known as E5.

The UK is still pressing ahead with plans to hit EU renewable energy targets, including a requirement for 10 per cent of transport fuel to be renewable by 2020 and the generation of 15 per cent of its energy from renewable sources by 2020. More importantly, the UK’s own targets for cutting carbon emissions are even more stringent than EU targets, and will still be legally binding irrespective of the decision on Brexit.

But there is increasing frustration that the Government is not moving quickly enough to introduce a green solution that would play a major role in helping to tackle priority areas, including the decarbonisation of the UK’s transport sector and investment in the North of England.

Graham Stuart and I wholeheartedly support Vivergo’s call on the Government to increase ethanol blending levels in petrol to 10 per cent, including the introduction of ‘E10’ petrol at British pumps in 2017.

Not only would this help deliver on the decarbonisation in transport agenda – its introduction would deliver carbon savings equivalent to taking 700,000 cars off the roads – but it would also give a boost to business, jobs and farmers, providing the certainty required for the UK bioethanol industry to really deliver.

It’s time for Government to act not only for the sake of this burgeoning industry, but for Hull’s future as the UK’s green energy estuary. It’s time to show support for E10 and in turn provide certainty to the bioethanol industry at a critical time. Only then can Vivergo Fuels concentrate on the things they do best: delivering a massive boost to UK business, UK jobs and UK farmers.

Alan Johnson is the Labour MP for West Hull and Hessle. He is a former home secretary.

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