The announcement that Vivergo Fuels will be closing its door for good has been described as a "significant blow" to the British grain industry, the NFU has said.
The bioethanol producer, which sources from 900 farms, has blamed its closure on the government's slow implementation of E10 and an uncertain business environment.
Vivergo Fuels’ plant is the UK’s largest and Europe’s second largest producer of bioethanol, a low-carbon renewable transport fuel which is blended with petrol.
The bioethanol plant can produce up to 420 million litres of bioethanol and the bioethanol is made from 1.1 million tonnes of feed wheat, sourced from nearly 900 farms mostly across the East and North Yorkshire and Northern Lincolnshire regions.
The company's proposed cessation of production is the 30 September.
'Significant blow'
NFU combinable crops board chairman, Tom Bradshaw said the announcement is a "significant blow" to the 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,” Mr Bradshaw said.
“Farmers have made long-term commitments to supply the biofuel industry and will be frustrated they are now left with a much reduced market for their product.”
Farmers supplying wheat into the plant will now have to find somewhere else to sell their product, which is 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,” Mr Bradshaw added.
'Government procrastination'
Protein feed is a highly sustainable co-product of bioethanol production, reducing the reliance on imported soya meal.
However, the biofuel industry has suffered for a number of years following government procrastination on renewable fuel policy.
The private sector has invested hundreds of millions of pounds on the premise of a supportive policy, only to be let down by government back-tracking, according to the NFU.
Mr Bradshaw added: “E10 petrol needs to be embraced, particularly as it is a clear match for the green Brexit the government is trying to deliver. We continue to call on the government to fast-track the introduction of E10 to the UK fuel mix.”
Vivergo Fuels is also the country’s largest single production site for animal feed, delivering 500,000 tonnes of high protein feed to over 800 farms across the UK.
