Redundancies Begin at UK’s Largest Bioethanol Plant Following Government Bailout Rejection

Published: 19 August ‘2025. The English Chronicle Online

Redundancies have begun at the United Kingdom’s largest bioethanol plant after the government declined to provide financial support to the facility, leaving its owners with no option but to commence a phased closure. On Tuesday, around 60 employees, roughly a third of the workforce, received redundancy notices, with the remaining staff set to leave over the coming months as the business winds down in an orderly manner.

The plant, operated by Vivergo Fuels—a subsidiary of Associated British Foods—converts wheat into bioethanol, a key component in petrol designed to reduce carbon emissions. Vivergo Fuels announced on Friday that the government’s refusal to intervene was “deeply regrettable,” attributing part of the financial strain to the recent UK-US trade deal that removed the 19% tariff on American bioethanol, leaving the plant exposed to cheaper imports. The company had already been incurring losses of £3 million per month, compounded by high energy costs.

Vivergo described the decision as a “flagrant act of economic self-harm” that risks pushing the bioethanol sector toward collapse, warning of significant consequences for the local community and the wider supply chain. The Lincolnshire facility also serves as the UK’s largest single production site for animal feed, a byproduct of ethanol manufacturing, highlighting the wider economic impact of the closure.

The National Farmers’ Union (NFU) described the news as “terrible” not only for the employees facing redundancy but also for thousands of people whose livelihoods rely on the bioethanol supply chain.

Earlier this year, Vivergo had signaled its financial difficulties and held crisis talks with the government regarding potential support options. In response, a government spokesperson stated that direct funding was rejected as it would not represent value for taxpayers nor address the long-term structural challenges facing the sector.

Trade unions expressed sharp criticism of the decision. Sharon Graham, general secretary of Unite, labelled the move “short-sighted,” while Charlotte Brumpton-Childs of the GMB union attributed the closure to the effects of trade deals and tariff changes, lamenting the loss of livelihoods for working people.

By the end of the year, all 160 staff at the site are expected to have left, and plans are underway for the eventual demolition of the facility, marking the end of operations at the UK’s largest bioethanol production site.