US-UK Trade Deal:
Negative Impact
for Tees Valley
Bioethanol Industry
and Beyond
Interior of Ensus Bioethanol Plant, Wilton, Teesside (photo courtesy of Ensus)
Scott Hunter
29 May 2025
While Starmer’s recent trade deal with the US came as a relief for many, especially in the motor industry, examination of the detail reveals some negative impacts for the Tees Valley and the wider region particularly in relation to the manufacture of bioethanol.
The Financial Times (paywall) reports (“UK bioethanol factories face closure after Trump trade deal”) that the deal, in exchange for reduced tariffs on motor vehicles, allows a quota of bioethanol to enter the UK tariff free. In consequence of this, the UK’s own existing bioethanol plants are facing possible closure. There are currently two such plants, one of which is Ensus at Wilton (the other is Vivergo, near Hull). But, for Tees Valley there is disproportionate risk, as it may also impact the development of a net zero cluster, which, despite other problems around the work of the devolved authority, is an important aspect of the economic regeneration of the region.
Industry figures have warned that the crisis in bioethanol constitutes a “loss of critical infrastructure”. It is an industry that, until now, has had no public profile.
Ensus provided us with a statement that gives a clear indication of just how significant it is for a wide range of sectors:
“The main UK ethanol production companies - Ensus on Teesside and Vivergo in Humberside - held a meeting in London with Jonathan Reynolds, the Secretary of State for Business and Trade on May 14 and discussions with the government continue. Redcar MP Anna Turley was instrumental in pulling the meeting together.
“Some facts about Ensus: The company is owned by the German company CropEnergies and has been operating at the Wilton International site for the past 15 years. It employs around 100 people directly at Wilton, but has a much wider supply chain of around 3,000 people throughout the region including:
“- farmers (who supply more than 1m tonnes of wheat to the plant annually and also buy around 350,000 tonnes a year of the high protein animal feed that is one of the by-products of the process. Note: British wheat is typically high in starch and low in protein, but the distillation and fermentation process that both Ensus and Vivergo follow to make their main product ethanol (or alcohol) effectively strips the wheat of the starch leaving a high protein by-product called DDGS that UK farmers need in their animal feeds)
“- hauliers
“- product storage firms
“- energy providers
“- engineering and maintenance contractors etc...”
To this we may add CO2, used in the food industry, the NHS and elsewhere, is a by-product of bioethanol manufacture, and Ensus has stated in the past (the Standard, 2021) that it produces 40% of the country’s supply at Wilton, and the closure of the Wilton and Hull plants would increase the risk of CO2 shortages across the UK in the future (and CO2 production capacity has already been reduced following the closure in 2023 of the CF Fertiliser plant in Billingham).
The bioethanol itself is used in petrol, as a sustainable additive (E10). The loss of the bioethanol industry will impact not only the cost of fuel for motor vehicles, but possibly also investment in sustainable aviation fuel, an industry that will have a foothold on Teesside as a developing hub for net zero (in two proposed plants at Teesworks – Circular Fuels and a venture by Willis Sustainable Fuels).
The crisis has echoes of the problems the steel industry endured some years ago when Chinese steel imports were undercutting the market rate for the product. At that time (from 2014) the British government was instrumental in refusing to support European producers, which was one of the factors leading to the demise of the steel industry in Redcar. And the dumping of bioethanol by US manufacturers has been a chronic problem, as reported by The Gazette as far back as 2013 (when the EU took steps to combat it).
The UK-US trade deal currently allows for US bioethanol manufacturers to undercut the price and run British producers out of business. Free market competition on the one hand, and the compromising of UK energy security on the other. Gaynor Hartnell of the Renewable Transport Fuel Association has stated “We’re on the verge of losing critical UK infrastructure unless the government acts swiftly. These plants need to know there will be support and very soon”.
Criticism of government over this issue has to be tempered with recognition of how difficult it must be to negotiate any deal with the chaotic US president. But now that the US-UK deal has been done, it is incumbent on the UK government to address its unforeseen (or, rather, dimly perceived) consequences and move to protect a critical industry for food and fuel security, farming and the progress of net zero.
As for the Tees Valley, the risk of job losses is significant. Beyond potential job losses in the area the crisis may also serve to undermine the programme of economic regeneration that is the function of the devolved authority. We await the intervention of the Tees Valley mayor.