ABF warns of Vivergo bioethanol plant closure amid UK-US tariff deal, regulatory uncertainty
Associated British Foods halts wheat buying and begins consultations as UK bioethanol unit faces shutdown due to market shifts.
UK – Associated British Foods (ABF) has issued a warning that its Vivergo bioethanol plant may be shut down unless the UK Government provides immediate financial support and develops a sustainable long-term strategy for the business.
The move follows a new UK-US trade deal, which will eliminate the current 19% tariffs on American ethanol and allow up to 1.4 billion litres of duty-free imports into the UK.
The volume matches the country’s entire ethanol market, posing a significant challenge for domestic producers. The agreement, signed by Prime Minister Keir Starmer in May, comes into effect on Monday.
ABF stated that formal discussions with the government are now underway. However, it has already initiated employee consultations and suspended wheat purchases for the Vivergo plant as of June 11.
Vivergo, based in East Yorkshire, produces renewable bioethanol fuel from locally sourced wheat.
“Unless the Government is able to provide both short-term funding of Vivergo’s losses and a longer-term solution, we intend to close the plant once the consultation process has completed and the business has fulfilled its contractual obligations,” ABF said.
The company indicated that manufacturing would cease before the end of its financial year on 13 September 2025.
Vivergo and Ensus, the latter owned by Germany’s Südzucker Group, constitute nearly all of the UK’s bioethanol production capacity. The potential closure of Vivergo could significantly impact the domestic renewable fuel industry.
In a related update, ABF also confirmed a strategic restructuring of its Spanish sugar business, Azucarera. Beet processing operations will be consolidated at a single site in northern Spain to improve efficiency and cut costs.
Despite weather-related delays in Africa, ABF reported strong current sugar production and maintained its annual guidance for the Sugar segment.
The company recently signed a £1.25 billion Memorandum of Understanding with Meld Energy to explore establishing a Sustainable Aviation Fuel (SAF) facility at the Vivergo site.
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