AB Foods delays UK bioethanol plant closing decision by 24 hours

Associated British Foods extended the deadline to decide the fate of Vivergo Bioethanol Plant, which faces closure. They are hoping that the UK government will provide a financial package. On June 11, the company had set a Wednesday deadline before it began redundancy discussions for the 160 employees at the Hull plant, Northern England. If no agreement was reached with the government, to reduce the impact of the U.S.-UK Trade Deal last month, the consultations would begin.

The UK will reduce its tariffs of 19% on U.S. Ethanol to zero through a quota of 1.4 billion litres (370 million gallons) which is the same as the UK’s current ethanol market.

AB Foods, owned by Germany’s Sudzucker Group, and Ensus which operates a bioethanol facility in Teesside, Northern England, warned that this trade deal and existing regulations, giving U.S. producers a competitive advantage on the British market have made operating conditions impossible.

A spokesperson for AB Foods said that ABF had agreed to delay Vivergo's closure decision for 24 hours at the request of government. Discussions are ongoing on the best process to resolve the issues facing UK bioethanol producers.

Together, Ensus and Vivergo account for almost all the UK's capacity to produce bioethanol. Their plants, along with their supply chain partners support thousands of jobs.

The British concession on ethanol came in exchange for the removal 25% extra tariffs on steel, aluminium and 100,000 cars with a 10% duty. (Reporting and editing by Catarina demony and Matthew Lewis in London)

(source: Reuters)