Chemicals giant Ensus has warned its Wilton biofuels site on Teeside – a key supplier of CO2 gas critical to the food sector – now faces “imminent closure” due to conditions laid out in last month’s UK/US trade deal.
The US-UK Economic Prosperity Deal, announced on 8 May, will see US exporters given tariff-free access to the UK market for up to 1.4 billion litres of bioethanol, of which CO2 gas and high-protein animal feed is a byproduct.
Ensus, alongside the UK’s other key bioethanol producer, ABF subsidiary Vivergo Fuels, had warned in the aftermath of the deal’s announcement that the late addition of bioethanol to the agreement could render their businesses “unviable” – given how the quota allowance for US exporters matched the total annual UK output of the biofuel.
The business today went a step further, warning the deal had “fundamentally undermined its business position”.
The closure of the Wilton plant – which can produce 400 million litres of bioethanol from wheat supplied by British farmers – was a real threat, and could plunge key parts of the economy into crisis, it added.
“We are at the 11th hour and the government urgently needs to find a solution to a crisis of its own making,” said Ensus UK chairman Grant Pearson. “We need a solution which will not only save these skilled jobs on Teesside, but also prevent a catastrophic knock-on effect in other vital sectors of the economy.”
Read more: Will UK producers benefit from trade deal with the US?
The potential closure of the Ensus plant, which he described as a “profitable, growth generating business”, would be “a disaster for the UK’s ability to develop a green industrial base as we are part of the solution to decarbonising the UK’s chemical industry and producing important products for the future such as sustainable aviation fuel”, Pearson added.
Given its wide range of uses, from carbonating drinks to the slaughtering of livestock and controlled atmosphere packaging, previous shortages of CO2 gas have led to a series of issues across the food sector – with a crisis in 2018 leading to shortages of both food and drink. Fears over supply were also raised in 2021 and 2022, leading the government to have to step in to broker a deal with gas producers.
Ensus’ warnings follow what it describes as “crisis talks” with business secretary Jonathan Reynolds last month. The business and Vivero were “working together to urge the government to raise the demand for ethanol in the UK above the US quota level”, it said.
“The situation facing Ensus as a result of the current terms of the US-UK trade deal is extremely serious,” said Tees Valley mayor Ben Houchen.
“Without immediate government action, the company risks significant disruption that could lead to hundreds of local job losses here in Teesside. The chemical sector is the backbone of countless industries and this trade deal, as it stands, has the potential to cripple it.”
This was “simply unacceptable – we urgently need clarity and intervention now”, Houchen urged.
It comes as the full detail of the contents of the US trade deal – short of previous announcements on access to US beef and the bioethanol – is yet to be disclosed. The Times last week reported the business secretary was “hopeful” the full agreement would be signed this week. The Department for Business & Trade declined to comment.
A spokesman did, however, stress the US trade deal had been signed in the national interest and would secure thousands of jobs across key sectors.
“The business and transport secretaries met with representatives from the bioethanol industry last week and we continue to work closely with them to understand the impacts of the UK-US trade deal.”
No comments yet