Unlock the Editor’s Digest without spending a dime
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 world commodities buying and selling big Trafigura, stated on Thursday that it deliberate to finish biodiesel manufacturing in Immingham, in north-east Lincolnshire. The product is mixed into regular diesel to scale back carbon dioxide emissions from transport.
The corporate blamed troublesome market circumstances as a result of competitors from US imports and insufficiently formidable 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 12 months of biodiesel, principally from used cooking oil. It accounts for a few quarter of the UK’s biodiesel manufacturing capability.
Adam Traeger, chief govt of Greenergy, stated it did “not have sufficient certainty on the outlook for UK biofuels coverage to make the substantial investments required” to make the Immingham web site aggressive.
Trafigura purchased Greenergy from Canadian infrastructure big Brookfield final 12 months for an undisclosed value, saying it deliberate to “discover new alternatives that may help 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 only some miles away, collapsed into insolvency, placing about 400 jobs in danger.
The UK’s biodiesel business has come beneath 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 saved theirs in place.
The UK Commerce Cures Authority opened an anti-dumping investigation into HVO imports from the US final 12 months, following complaints from British producers.
Greenergy additionally stated Britain’s coverage on the proportion of highway transport gas which should come from renewable sources, akin to biodiesel or bioethanol, was decrease than European international locations. The UK’s present goal of 12.15 per cent is ready to rise to 14.6 per cent by 2032.
Final 12 months, 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 stated it’s going to shut its Hull-based Vivergo unit — Britain’s largest bioethanol plant — except the UK affords extra supportive insurance policies. Bioethanol is constituted of 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 govt of ABF Sugar, stated the federal government wanted to create a stage taking part in subject for UK biofuel producers.
“Proper now the UK coverage setting is doing the other. It’s driving away funding, distorting the market and placing strategically vital websites liable to closure . . . time is operating out,” Kenward stated.
A spokesperson for the federal government stated: “We’re participating with the corporate [Greenergy] to know the challenges and the way we will handle their considerations.”
