Vivergo Fuels fears 150 jobs could go at Saltend plant without Government help

By Hull Daily Mail | Posted: 23 Feb 2017

AN EAST Riding business says it fears closure, with the loss of at least 150 jobs, and thousands more roles impacted in the industry, if the Government fails to act to support its manufacturing activities.

Vivergo Fuels is the UK's largest producer of bioethanol – it is mixed with conventional petrol to make a greener, more sustainable transport fuel – and high-protein animal feed at its Saltend plant.

The company says the Government has been dragging its heels for years on implementing policy that would secure the future of Vivergo, its wider supply chain and the bioethanol industry as a whole.

Now, Mark Chesworth, managing director of Hessle-based Vivergo, has told the Mail: "We are at a critical stage in the evolution of bioethanol as a fuel of the future."A recently closed Department for Transport (DfT) consultation presents possible opportunity for the industry, but also real risk of closure and significant job losses both on plant but also in the wider supply chain."

Vivergo's £350m plant converts 1.1m tonnes of feed-grade wheat a year, sourced from Yorkshire and Lincolnshire farms, into enough bioethanol to meet up to one half of the UK's current demand for blended (E5) petrol.

This offers green house gas savings of 50 per cent over standard petrol – the equivalent of taking 180,000 cars off the road.

At the same time, Vivergo delivers enough protein rich animal feed needed for 340,000 dairy cows – or almost 20 per cent of the UK dairy herd – a day.

Mr Chesworth said: "Industry has been on hold since 2012 with blending levels capped through the Renewable Transport Fuel Obligation (RTFO) at 4.75 per cent, or E5, which is present in all petrol at UK pumps."We welcome the Government's proposal to increase the blending of ethanol in petrol to 9.75 per cent (E10), but we have major concerns around proposals to limit the amount of crops used to produce the ethanol at either 0 per cent or 2 per cent."

A UK consultation paper to meet Europe's Renewable Energy Directive, which closed in January, covered increasing the RTFO from 4.75 per cent to 9.75 per cent by 2020, and a cap of 0 per cent, 2 per cent or 7 per cent on the amount of crop based feedstock that can contribute to the target – the DfT stating a preference for 2 per cent.

"A 0 per cent cap closes first-generation bioethanol plants, including Vivergo Fuels, and the jobs in Hull and the region that go with them; a 2 per cent cap puts them at risk of the same, because it would not grow the market and would lead to a failed rollout of E10, which would be devastating for the industry."

The majority of Holderness farmer John Holtby's feed-grade wheat crop goes to Vivergo. He said: "This has been a huge new market for us and we are very much against the Government placing restrictions on the amount of crops used to produce bioethanol."Our merchant would have to find other ways of getting rid of the surplus crop for us, and I guess that would be by trying to export it, but then you are competing with everyone else in Europe and selling at the bottom of the market, whereas we are selling at the moment at a much better price."

Mr Holtby's family have been farming at Skirlaugh for 120 years.The farm of just under 1,000 acres cultivates some wheat for bread production, winter barley and oil seed rape, as well as the feed-grade wheat.

Mr Holtby also has about 750 pigs and rears turkeys for Christmas.

He said: "On the other side of things, Vivergo produces 500,000 tonnes of animal feed per year, and that has to come from somewhere."

Vivergo claims the industry supports thousands of jobs; plays a vital role in developing STEM skills, and provides a home-grown, greener fuel which is directly helping Government in its efforts to decarbonise transport and meet legally binding targets.

"As one of the Government's Northern Powerhouse Partners, and given that it is Hull's UK City of Culture Year, it would be disastrous to see companies such as Vivergo, and as a direct consequence, the wider region, suffer," said Mr Chesworth.

"By lifting the crop cap, the Government can prove its commitment to its own Industrial Strategy and the Northern Powerhouse and deliver a significant boost to an industry that is capable of delivering more growth, more jobs, more investment and more innovation. "It will also enable E10 to be effectively rolled out, providing Government with the cheapest, quickest and most effective solution to decarbonise transport and meet challenging targets.

"It is time for the Government to act, not only for the sake of a burgeoning industry and the thousands of jobs it supports, but also for Hull's future as the UK's green energy centre and the role it plays within the Northern Powerhouse.

"Only this will provide certainty for UK business, UK jobs and UK farmers."

Graham Stuart, MP for Beverley and Holderness, was at the official opening of Vivergo Fuels' Saltend plant almost four years ago.

Mr Stuart said: "I fully support Vivergo and want to see it have a bright future, helping the country reduce its carbon footprint, providing high value animal feed and giving a huge boost to local farming."

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