Tuesday, December 11, 2018

Farmers set to bear brunt of bioethanol plant closure

October 1, 2018 by  
Filed under News & Business

Closure of the Vivergo bioethanol plant has dented wheat prices – and left 1m tonnes of grain looking for a home while easing pressure on buyers to secure stocks.

Announcing a proposed date of 30 September to cease production, company bosses blamed an ongoing difficult trading environment and government delays in ensuring that road fuel contains a higher proportion of bioethanol.

Thanking farners and customers for their support, Vivergo Fuels managing director Mark Chesworth said: “We have created a highly skilled and world-class business that had the opportunity to be part of a British sustainable biofuels industry.

‘Significant blow’

“But sadly, the Government’s lack of pace over the past decade to introduce E10 bioethanol has further undermined our ability to operate. My employees are my number one concern at this time and we have entered into consultation with them.”

Gleadell grain trading director Jonathan Lane said confirmation of the Vivergo closure at the end of September, plus a bounce in sterling on some pro-deal Brexit chat, had taken wheat prices lower, with end buyers relatively relaxed about extending forward cover.

NFU combinable crops board chairman Tom Bradshaw said the union’s sympathy was with Vivergo employees. Farmers had made long-term commitments to supply the biofuel industry and would be frustrated they are now left with a much reduced market for their product.

“This announcement is a significant blow for the UK grain industry. As the largest single intake for feed wheat in the county, it will particularly hit arable and livestock farmers in the north-east where the plant is based.”

Biofuel industry

The closure will impact on growers in this region too. Mr Bradshaw said: “Farmers supplying wheat into Vivergo will have to find somewhere else to sell their product, and that’s likely to be a greater distance from the farm resulting in increased transport costs and a lower price.

“At a time when livestock farmers are suffering with feed shortages, this decision will also have serious knock-on effects for protein feed availability with farmers becoming more reliant on imported feed for their livestock.”

Protein feed was a highly sustainable co-product of bioethanol production, reducing the reliance on imported soya meal. But the biofuel industry had suffered for a number of years following government procrastination on renewable fuel policy.

The private sector had invested hundreds of millions of pounds only to be let down by government back-tracking, said Mr Bradshaw. Higher levels of bioethanol in petrol needed to be embraced, particularly as it matched the government’s ambition for a green Brexit.

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