£1.25bn deal in doubt over Vivergo closure fears

Meld Energy's plan for a green jet fuel facility at Saltend Chemicals Park is dependent on Vivergo Fuels, which is facing closure

A green jet fuel investment worth £1.25bn could be at risk if the UK's largest bioethanol plant is forced to close, the firm behind it has said.

Meld Energy signed an agreement with Vivergo Fuels earlier this year for a Sustainable Aviation Fuel facility at the Saltend Chemicals Park in Hull.

However, Vivergo's future has been put in doubt over the past few months after the decision to end the 19% tariff on US bioethanol imports as part of the recent UK-US trade deal.

Meld Energy CEO and founder Chris Smith said that without Vivergo at the site they may have to look overseas where "that infrastructure is already in place".

He 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.

"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's comments came as the Vivergo plant was expecting its last scheduled wheat delivery from a farm in Lincolnshire on Friday.

'Urgent support needed'

Last month, Vivergo Fuels, which is owned by Associated British Foods and employs more than 160 people, said staff had been told about its uncertain future, which could see production stop before 13 September, if it does not get support.

Earlier this year, managing director Ben Hackett also wrote to wheat growers to say that the plant will only be able to honour existing contracts for wheat purchases while the uncertainty continued.

Mr Hackett said: "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."

A government spokesperson said officials and ministers have met with Vivergo over the past few months to discuss options over the "significant challenges" that the bioethanol industry had been facing for some time.

"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 spokesperson added.

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