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UK Bioethanol Sector Struggles As It Faces Sceptical Government

Chris Tighe, Financial Times

The EU wants to derive at least 10 per cent of transport fuels from renewable sources by 2020. But the transport department said: “We don’t want to see vast amounts of food crops being used as fuel, which is why the government is encouraging the development of fuels derived from waste.”

The £350m bioethanol complex where Dave Nicholson and Jason Nicholas are employed has been mothballed for nearly half its life.

The Ensus plant on Teesside, which started work in 2010, was launched in the belief an EU push to reduce carbon emissions from road transport would drive demand for bioethanol, produced by fermenting wheat or sugar beet.

Instead, the massive silent complex of fermenters, distillation columns and conveyors illustrates how political and commercial pressures — from environmental protests to the tumbling oil price — have borne down on the UK bioethanol sector.

Where oil prices go, biofuel generally follows. There is also the problem of demand. With ample production serving continental Europe, the UK’s three plants depend on the domestic market. However, the industry has been disappointed by government targets. Under the Renewable Transport Fuels Obligation, 4.75 per cent of transport fuel must come from a renewable source: producers had hoped for a much higher level.

“The tragedy of the situation is that the market in the UK has not developed as expected because of the political concerns,” says Ensus chairman and co-founder Sir Rob Margetts.

Despite heavy financial losses, past and present owners of Ensus have kept faith with the project, maintaining its 98 employees on full pay through three shutdowns, totalling two years, caused by adverse market conditions. The employees have kept busy with maintenance and modification work.

But the latest shutdown, which began in February after a sharp fall in biofuel prices, could last until 2017

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