Bioethanol plant shuts down ahead of schedule due to poor market

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Vivergo Fuels has brought forward a scheduled maintenance shutdown of its plant in Salt End near Hull to the end of the month.

The AB Sugar-owned plant said it was bringing the closure date forward due to poor market conditions and what it called “Government inaction on tackling rising transport emissions”.

When all maintenance activity has been completed and tested, Vivergo will make a decision on when to restart the plant.

The plant makes high protein animal feed and bioethanol (E5) which can in turn be used to mix in with petrol to power cars to make fuel more environmentally friendly. It currently makes up five per cent of the fuel sold in the UK and wants this level to be increased to 10 per cent, something that Government has yet to give the go-ahead to.

Mark Chesworth, managing director of Vivergo Fuels, said: “We have taken the decision to bring forward our annual maintenance work in response to the current market conditions that would impact our profitability significantly.

“We are operating in an environment whereby bioethanol prices over the last six weeks have fallen significantly, impacting profitability margins. Whilst there has been some increases in supply this year, the market for bioethanol in Europe, and in particular the UK, remains constrained by the Government’s inaction on rising transport emissions.

“In September, we reluctantly welcomed the Government’s Renewable Transport Fuel obligation proposals but we remain concerned about the proposed post 2020 year-on-year reduction. The decreasing cap is predicated on a number of uncertainties and could have serious consequences for the long-term future of the British bioethanol industry, jobs in the North of England and domestic agriculture.

“It is vital that we see legislation introduced to the UK to increase the blending of bioethanol in petrol; the cheapest, simplest most readily available environmentally friendly option for consumers to help reduce the impact of road transport on our environment; and to provide stability and confidence in the future of the bioethanol industry for producers.”