Fears over bioethanol plant ‘putting £1.25 billion jet fuel project in jeopardy'
On Friday, Meld Energy said the situation is putting its plans for a 'world-class' green jet fuel project on the Humber in jeopardy.
Earlier this year, Meld Energy signed a £1.25 billion agreement with Vivergo Fuels to anchor a Sustainable Aviation Fuel (SAF) facility at Saltend Chemicals Park in Hull.
Wiithout urgent government support for British bioethanol, the UK risks losing that opportunity, along with the jobs and billions of pounds in investment that depend on it. Ben Hackett, Managing Director of Vivergo Fuels
Meld Energy CEO and founder Chris Smith said: 'We're excited about the potential to bring our sustainable aviation fuel project to the Humber – one of the UK's most important industrial and energy hubs.
'But, for projects like ours to succeed and the flow of vital investment to be forthcoming, we need a strong and integrated low-carbon ecosystem.
'A bioethanol plant on site at Saltend is a critical part of that mix. Without it, we'd have to consider alternative locations overseas where that infrastructure is already in place.'
Mr Smith was speaking as the Vivergo plant was expecting its last scheduled wheat delivery from a farm in Lincolnshire on Friday, as the site continues to wind down.
Vivergo Fuels managing director Ben Hackett wrote to wheat growers earlier this year explaining that the plant will only be able to honour existing contractual obligations for wheat purchases while uncertainty continues.
Mr Hackett said: 'Building a future fuels cluster here in Hull would deliver major economic, environmental and strategic benefits not just for the Humber, but for the whole country.
Vivergo Fuels says it will be forced to close its plant near Hull unless the Government acts (Vivergo Fuels/PA)
'We have the site, the skills, the supply chain and the ambition to lead the way on sustainable aviation fuel.
'But, without urgent Government support for British bioethanol, the UK risks losing that opportunity, along with the jobs and billions of pounds in investment that depend on it.'
Last month, the firm, which is owned by Associated British Foods (ABF), said it is was beginning consultation with staff to wind down the plant, which employs more than 160 people, due to the uncertain situation – a process which could see production stop before September 13, if support is not provided.
It said Britain's two largest bioethanol producers – Vivergo Fuels and Ensus in Teesside – are now in urgent negotiations with the Government.
The firms say the UK-US trade deal and regulatory constraints on the industry have made it impossible to compete with heavily subsidised American products.
A Government spokesperson said: 'We recognise this is a concerning time for workers and their families which is why we entered into formal discussions with the company on potential financial support last month.
'We will continue to take proactive steps to address the long-standing challenges the company faces and remain committed to working closely with them throughout this period to present a plan for a way forward that protects supply chains, jobs and livelihoods.'
The Government said officials and ministers have met with Vivergo and Ensus consistently over the last few months to discuss options to address 'significant challenges' that the bioethanol industry has been facing for some time.
It said engagement with the companies 'continues at pace' and external consultants have been brought in to help.
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