Britain’s biggest biofuel plant could close over impact of UK-US trade deal – The Guardian

Report on the Potential Closure of Britain’s Largest Bioethanol Plant and Its Implications for Sustainable Development Goals (SDGs)

Introduction

The owner of Britain’s largest bioethanol plant, Vivergo, located in Hull, has announced a potential closure by mid-September, threatening 160 jobs. This development follows warnings that concessions in the recent UK-US trade deal could severely impact the UK bioethanol industry. This report examines the situation with a focus on the Sustainable Development Goals (SDGs), particularly those related to industry, innovation, infrastructure (SDG 9), decent work and economic growth (SDG 8), responsible consumption and production (SDG 12), and climate action (SDG 13).

Background and Current Situation

1. Company and Industry Overview
   • Associated British Foods (ABF), owner of Vivergo, is also known for Primark and Kingsmill bread.
   • Vivergo produces bioethanol, a renewable fuel and petrol substitute, using locally sourced wheat.
   • ABF ceased wheat purchases for bioethanol production on 11 June due to industry challenges.
2. Impact of UK-US Trade Deal
   • The trade deal, effective from May, eliminates the 19% tariff on US ethanol within a 1.4 billion-litre quota, equivalent to the entire UK ethanol market.
   • ABF claims this tariff removal threatens the viability of the UK bioethanol industry by allowing tariff-free US ethanol imports.
   • Downing Street denies a direct link between the plant’s potential closure and the trade deal, citing pre-existing industry challenges.
3. Negotiations and Government Response
   • ABF has entered formal negotiations with the UK government regarding the plant’s future.
   • Consultations with staff have begun to plan an orderly wind-down if no viable solution is found.
   • The government has engaged with ABF and Ensus, another bioethanol producer, to explore support options.
   • Despite ongoing talks, ABF has set a deadline of 13 September for closure unless financial support is provided.

Implications for Sustainable Development Goals (SDGs)

1. SDG 8: Decent Work and Economic Growth
   • The potential closure threatens 160 direct jobs at Vivergo and thousands more in the supply chain.
   • Job losses would affect local economies and livelihoods, undermining inclusive and sustainable economic growth.
2. SDG 9: Industry, Innovation, and Infrastructure
   • Bioethanol production represents an innovative renewable energy industry critical for sustainable infrastructure.
   • Closure risks weakening the UK’s biofuel production capacity and industrial innovation in renewable energy.
3. SDG 12: Responsible Consumption and Production
   • Vivergo’s use of locally sourced wheat supports sustainable agricultural practices and responsible production.
   • Importing tariff-free US ethanol may undermine local sustainable production and increase carbon footprints due to transportation.
4. SDG 13: Climate Action
   • Bioethanol as a renewable fuel contributes to reducing greenhouse gas emissions from fossil fuels.
   • Closure of domestic bioethanol plants may hinder the UK’s progress toward climate targets and renewable energy adoption.

Additional Trade Deal Considerations

• The trade deal also includes tariff reductions on British cars and ongoing negotiations regarding steel tariffs.
• Concerns exist over the origin of materials in UK steelworks affecting tariff exemptions.
• These trade elements may indirectly affect industrial sectors related to bioethanol production and broader economic sustainability.

Statements and Future Outlook

• ABF spokesperson emphasized ongoing transparent engagement with officials to find a viable path forward.
• Government officials acknowledged longstanding challenges in the bioethanol sector predating the trade deal and expressed commitment to supporting the industry.
• Ministers aim to protect supply chains, jobs, and livelihoods through proactive measures.
• The final decision on Vivergo’s future depends on the outcome of negotiations and potential financial support.

Conclusion

The threatened closure of the Vivergo bioethanol plant highlights significant challenges at the intersection of international trade, renewable energy production, and sustainable development. The situation underscores the need for policies that align trade agreements with the United Kingdom’s commitments to the Sustainable Development Goals, particularly those promoting sustainable industry, economic growth, and climate action. Continued dialogue between industry stakeholders and government is essential to secure a sustainable future for the UK bioethanol sector and the communities it supports.

1. Sustainable Development Goals (SDGs) Addressed or Connected to the Issues Highlighted in the Article

1. SDG 7: Affordable and Clean Energy

   • The article discusses bioethanol as a renewable fuel and petrol substitute, highlighting the importance of clean energy sources.

2. SDG 8: Decent Work and Economic Growth

   • The potential closure of the Hull bioethanol plant threatens 160 jobs and affects thousands more in supply chains, impacting employment and economic stability.

3. SDG 9: Industry, Innovation, and Infrastructure

   • The bioethanol industry represents industrial activity and innovation in renewable energy production.

4. SDG 12: Responsible Consumption and Production

   • Use of locally sourced wheat for bioethanol production reflects sustainable production practices.

5. SDG 17: Partnerships for the Goals

   • The article highlights trade negotiations between the UK and US, emphasizing international cooperation and partnerships affecting sustainable development.

2. Specific Targets Under Those SDGs Identified Based on the Article’s Content

1. SDG 7: Affordable and Clean Energy

   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix.

2. SDG 8: Decent Work and Economic Growth

   • Target 8.5: Achieve full and productive employment and decent work for all women and men.
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.

3. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies.

4. SDG 12: Responsible Consumption and Production

   • Target 12.2: Achieve the sustainable management and efficient use of natural resources.

5. SDG 17: Partnerships for the Goals

   • Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization.
   • Target 17.11: Significantly increase the exports of developing countries, in particular with a view to doubling the least developed countries’ share of global exports.

3. Indicators Mentioned or Implied in the Article to Measure Progress Towards the Identified Targets

1. SDG 7 Indicators

   • Proportion of energy from renewable sources (implied by bioethanol production volumes and market share).
   • Volume of bioethanol produced domestically (e.g., Vivergo plant production capacity).

2. SDG 8 Indicators

   • Number of jobs supported in the bioethanol industry and related supply chains (160 jobs at risk at Hull plant, thousands supported overall).
   • Economic output or productivity of the bioethanol sector.

3. SDG 9 Indicators

   • Capacity and output of bioethanol production facilities (Vivergo and Ensus plants).
   • Adoption rate of renewable fuel technologies in industry.

4. SDG 12 Indicators

   • Use of locally sourced agricultural products (wheat) for bioethanol production.
   • Efficiency and sustainability of resource use in production processes.

5. SDG 17 Indicators

   • Tariff rates on ethanol and steel imports/exports (e.g., reduction from 19% to zero on US ethanol imports, 25% tariff on steel).
   • Volume of trade under new agreements (e.g., 1.4bn-litre quota for tariff-free US ethanol).
   • Number and outcomes of trade negotiations affecting sustainable industries.

4. Table of SDGs, Targets, and Indicators

Source: theguardian.com