Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
A biodiesel plant in northern England is ready to shut within the newest blow for UK business following the collapse of an oil refinery in the identical space final week.
Greenergy, owned by international commodities buying and selling large Trafigura, mentioned on Thursday that it deliberate to finish biodiesel manufacturing in Immingham, in north-east Lincolnshire. The product is mixed into regular diesel to cut back carbon dioxide emissions from transport.
The corporate blamed troublesome market circumstances on account of competitors from US imports and insufficiently bold mandates for biodiesel use in Britain. The plans are topic to session with the refinery’s 60-strong workforce.
The plant produces greater than 100,000 tonnes a yr of biodiesel, principally from used cooking oil. It accounts for a few quarter of the UK’s biodiesel manufacturing capability.
Adam Traeger, chief government of Greenergy, mentioned it did “not have sufficient certainty on the outlook for UK biofuels coverage to make the substantial investments required” to make the Immingham website aggressive.
Trafigura purchased Greenergy from Canadian infrastructure large Brookfield final yr for an undisclosed value, saying it deliberate to “discover new alternatives that may assist the transition to a decrease carbon future”.
Greenergy additionally owns a second, bigger biodiesel plant in Teesside, about 100 miles north of Immingham, and a 3rd within the Netherlands.
The deliberate closure of the Immingham plant comes lower than two weeks after the Lindsey oil refinery, which is just a few miles away, collapsed into insolvency, placing about 400 jobs in danger.
The UK’s biodiesel business has come underneath stress from an inflow of US imports after the UK eliminated tariffs on US hydrotreated vegetable oil (HVO), a type of biodiesel, in November 2022, however the EU stored theirs in place.
The UK Commerce Treatments Authority opened an anti-dumping investigation into HVO imports from the US final yr, following complaints from British producers.
Greenergy additionally mentioned Britain’s coverage on the proportion of highway transport gasoline which should come from renewable sources, similar to biodiesel or bioethanol, was decrease than European nations. The UK’s present goal of 12.15 per cent is ready to rise to 14.6 per cent by 2032.
Final yr, Argent Vitality set out plans to mothball its biodiesel plant in Motherwell, Scotland, blaming competitors from Chinese language and US imports.
ABF Sugar has additionally mentioned it can shut its Hull-based Vivergo unit — Britain’s largest bioethanol plant — except the UK gives extra supportive insurance policies. Bioethanol is created from sugars and blended into petrol.
The UK bioethanol business’s future was thrown into doubt in June after Prime Minister Sir Keir Starmer agreed a 1.4bn-litre tariff-free import quota for US ethanol as a part of a deal struck with US President Donald Trump. The quota is equal to the UK’s whole annual demand for the product.
Paul Kenward, chief government of ABF Sugar, mentioned the federal government wanted to create a degree taking part in subject for UK biofuel producers.
“Proper now the UK coverage setting is doing the alternative. It’s driving away funding, distorting the market and placing strategically vital websites vulnerable to closure . . . time is working out,” Kenward mentioned.
A spokesperson for the federal government mentioned: “We’re participating with the corporate [Greenergy] to know the challenges and the way we are able to deal with their considerations.”
