Ethanol production hit as fuel plants cease operations

Farmers in Yorkshire and the rest of the North-East have been adjusting to the unexpected closure of the Ensus bio-ethanol plant at Wilton, near Middlesbrough, which opened in January 2010, and which promised to be a major market for local wheat growers.

And the only other UK ethanol plant which was up and running, British Sugar’s at Wissington, Norfolk, is also now in mothballs because of winter’s devastation of the last sugar-beet harvest.

The Ensus plant stopped operating in mid-May and is not expected to start again until September, when this year’s harvests might have brought down the price of its raw material.

Grain industry experts said farmers were not suffering much, so far, from the loss of the market, but there was a minor knock-on effect on pork and beef producers, because the used grain had become an important source of cheap feed.

Charlotte Garbutt, a market analyst for the Agriculture & Horticulture Development Board, said the price of ethanol had been kept down by some European countries dragging their feet over the implementation of a requirement for all transport to use some sustainable biofuel.

Like Ensus, she would expect the market to pick up as the agreements start to take full effect.

She said: “They are playing a balancing game – what they can get for ethanol against the price of wheat – and both elements have been working against them.

“But they said when they closed down that they were expecting a better equation in two to four months.”

Ensus said all staff had been kept on in the expectation of an upturn.

Farmers within easy trucking distance of the plant had been getting up to £5 a tonne extra for feed-grade wheat, through grain dealers. But world demand is so high that their supplies are easily placed elsewhere.

British Sugar said its plant had been shut since early spring because all available sugar-beet had been diverted to sugar production. And there was now no prospect of a surplus before this autumn, when the next harvest begins.

A spokesman said: “Our economics are different from Ensus’s but whether or not we would find it viable to produce ethanol at current prices is academic for the time being.”

Used beet from ethanol production has no value as fodder.

Wake-up call to policy-makers

NFU cereals farming spokesman Ian Backhouse, who farms near Goole, said: “Policy-makers have been warned on many occasions of the effect of their delays and indecision around the Renewable Energy Directive on providing a stable market for sustainable biofuels. We hope this temporary shutdown wakes them up to the importance of ensuring a stable legislative environment for sustainable fuels.”