Vivergo Fuels plant to close after failure to secure government support - as 160 workers to be laid off

Vivergo Fuels, near Hull, has commenced its closure process after it called a recent Government decision not to offer direct funding to the industry as “a flagrant act of economic self-harm”.

Starting Tuesday, staff will be made redundant in phases over the coming months, with demolition of the site planned for the end of the year.

It comes months after Vivergo warned it was in imminent danger of closure prompting crisis talks with the Government.

This followed the end of the 19% tariff on American bioethanol imports as part of the recent UK-US trade deal, resulting in increased competition for UK providers.

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Speaking about Vivergo's cessation, a spokesperson said: “Vivergo Fuels has now ceased production and commenced a closure process which is expected to conclude in December.

"Redundancies will commence from Tuesday 19 August and will be phased over the coming months to ensure an orderly wind down of the business.

"All staff will have left by the end of the year when the site will be ready for demolition.”

Alex Snowden, Vivergo's operations director, described the plant's closure as "heartbreaking."

He told the BBC: "I'm from the local area, I live 10 minutes away from site. It's a huge part of my life.

"What we're doing effectively now is emptying the last of our brewery as we're winding down the plant."

Ben Hackett, managing director of Vivergo Fuels, previously complained that the industry had faced “unfair regulations” for years that favoured overseas producers, and the recent US-UK trade deal pushed the sector “to the point of collapse”.

He said: “We did everything we possibly could to avoid closure, but in the end it was the Government that decided the British bioethanol sector was something that could be traded away with little regard for the impact it would have on ordinary hard-working people.

“We did not go down without a fight and I hope that the noise we generated over the past three months will make the Government think twice before it decides to sign away whole industries as part of future trade negotiations.”

In May, the UK agreed to a trade arrangement lifting the 19% duty on American ethanol imports, up to a cap of 1.4bn litres - an amount that broadly matches domestic demand.

The move formed part of a wider pact under which Britain offered concessions in exchange for relief from tariffs threatened by Donald Trump on UK car and steel exports to the United States.

The Government said it had made the decision "in the national interest."

“We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade, and have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces," it said.

“We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process."

Vivergo said the Hull plant can produce up to 420 million litres of bioethanol from wheat sourced from thousands of UK farms.

It has described bioethanol production as “a key national strategic asset” which helps reduce emissions from petrol and is expected to be a key component in sustainable aircraft fuel in the future.

The firm recently signed a £1.25 billion memorandum of understanding with Meld Energy to anchor a “world-class” sustainable aviation fuel facility at the site.

But Meld Energy said earlier this month uncertainly over the bioethanol industry was putting this plan in jeopardy.

The Vivergo plant is also the UK’s largest single production site for animal feed, and the company says it indirectly supports about 4,000 jobs in the Humber and Lincolnshire region.

Vivergo has said it buys more than a million tonnes of British wheat each year from more than 4,000 farms, and has purchased from 12,000 individual farms over the past decade.