Britain refuses bailout bioethanol industry affected by Trump trade deal

The bioethanol industry in Britain is on the verge of collapse, after the government announced it would not be providing financial support to the sector that was hit by the UK tariff agreement with U.S. president Donald Trump.

A government spokesperson said that the decision to not offer direct funding was made because it would be of no value to the taxpayer and wouldn't solve long-term issues the industry faces.

The UK's tariffs of 19% on U.S. Ethanol have been reduced to zero under the May trade agreement. This is due to a quota of 1.4 billion litres (370 million gallons) which equals the UK's total ethanol market.

Britain's bioethanol production is largely accounted for by two large plants located in northern England: the Vivergo plant of Associated British Foods and Ensus (owned by Germany's Sudzucker Group)

AB Foods

In June,

Vivergo will close its plant in September unless government steps up with a package of aid. Ensus also announced that its plant would be closed.

A spokesperson for AB Foods stated that it was "deeply regretted" that the government had chosen to not support a national asset. Ensus didn't respond to a comment request immediately.

Both companies said that the trade agreement, as well as existing regulations which give U.S. manufacturers an advantage on the British market, has made the environment unachievable. The industry supports thousands UK jobs.

The bioethanol produced by crops like wheat is used in the production of sustainable aviation fuel and greener petrol. (Reporting and editing by Kate Holton; James Davey)

(source: Reuters)