UK ethanol and feed producer Vivergo Fuels recorded huge losses before shutdown

By Jane Byrne

- Last updated on GMT

Bird's eye view of Vivergo Fuels plant in Yorkshire © Vivergo Fuels
Bird's eye view of Vivergo Fuels plant in Yorkshire © Vivergo Fuels
Accounts just filed by Vivergo Fuels, a UK ethanol producer and a leading feed - DDGS - supplier in the UK market, show that, in the year up to the end of August, just before the plant closed, it made a loss before tax of £68.6m (US$87.9m).

In the previous year, it registered pre-tax losses of nearly £35.9.m.

The biofuel plant, located in Hull in Yorkshire, closed in September 2018 due what the company said was continued weakness in the EU ethanol market, with high wheat costs and low bioethanol prices. It added that delays in legislation regarding the introduction of E10 into the UK were also to blame.

E10 is a renewable transport fuel consisting of unleaded petrol blended with 10% bioethanol - roughly double the amount contained currently in the petrol motorists currently buy from UK pumps.

Vivergo’s Hull plant was the UK’s largest, and Europe’s second largest producer of bioethanol, a low-carbon renewable transport fuel that is blended with petrol. The facility, when fully operational, could produce up to 420 million liters of bioethanol. The fuel was made from 1.1m tons of wheat, sourced from nearly 900 farms across the East Yorkshire region. Vivergo also generated, as coproduct, 500,000 tons of high protein feed, DDGS, used by over 800 farms across the UK.

vivergo fuels plant site

Last September, Vivergo Fuels MD, Mark Chesworth, stated that the government's lack of pace over a period of 10 years to roll out that fuel in the UK had undermined the company’s ability to operate.

Richard Royal, head of government affairs at Vivergo Fuels, told this publication in 2017, that while a number of countries across Europe, North America and Australasia had already introduced E10 or higher blends of bioethanol into their unleaded petrol, he said, the UK had “lagged behind” ​and was “failing to meet its domestic and international commitments in this area”.

“In the event of E10 fuel being introduced in the UK, there is the potential to increase the market for domestic bioethanol. This inevitably increases the co-production of animal feed, and, of course the demand for feed wheat. As such, the introduction of E10 fuel would not only bring huge benefits to the environment by lowering transport emissions but also to British farmers by increasing domestic supply and demand and lessening their reliance on international trade at a time when it is becoming increasingly uncertain.”

Vivergo's plant was being maintained in case market conditions improved.

However, in this latest accounts filing, management at Vivergo said they “do not expect the situation to change in the foreseeable future.”

The plant first ceased production in December 2017, but started again in April 2018 in the hope conditions would improve.

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