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The British bioethanol industry could collapse as a result of Keir Starmer’s trade deal with Donald Trump, industry bosses have said.
The bosses of ABF Sugar and Ensus, the companies behind almost all of the UK’s production capacity of bioethanol – a petrol substitute produced from agricultural products – have said hundreds of jobs in north-east England and Yorkshire could be at risk as a result of the deal.
The new US-UK trade deal includes a concession by Starmer to reduce British tariffs on American ethanol from 19% to zero. However, this could lead to the closure of the two biggest plants in the country that make the fuel, executives have said.
Paul Kenward, the chief executive of ABF Sugar, and Grant Pearson, who chairs Ensus, told The Times the deal triggered “an existential threat” for the sector.
“Without immediate action, this vital sovereign capability will be lost,” they said. “We are fast approaching the point where we need to decide whether to sign new contracts. In the current conditions, that would be irresponsible.
“Hundreds of growers will lose a dependable market for wheat that cannot be used in bread making. Instead, they’ll be forced to export it at lower prices, while facing higher costs for imported animal feed.”
They added: “Without urgent government action, the UK’s bioethanol industry will simply vanish, leaving the country dependent on imported ethanol – while also losing significant domestic production of carbon dioxide and high-protein animal feed.” Carbon dioxide and dried grains are both byproducts of bioethanol.
While Starmer agreed to lower tariffs on American ethanol, the UK-US trade agreement has been hailed a win for British industries such as cars, aluminium and steel. The prime minister said it was a “fantastic, historic day” when he announced the agreements last week, claiming that the new policies could save thousands of British jobs.
The US agreed to cut the 25% tariff rate on British steel and aluminium exports to zero. American tariffs on up to 100,000 British cars will also drop to 10%, down from the 27.5% rate initially announced and UK ministers hope the quota can be raised.
A government spokesperson told The Times: “This government signed a deal with the US in the national interest to secure thousands of jobs across key sectors – from the auto industry to steel – and lay the groundwork for greater trade in the future.
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“We are meeting with leaders from all sectors, including ethanol producers, to discuss the impacts of this deal.”
It is understood that senior government figures met ABF and Ensus last week.
