US deal may force Redcar biofuel plant to close, Ensus warns

A bioethanol plant will be forced to close “imminently” unless the government acts, according to its operator.

Ensus, which runs the Redcar plant, said the recent UK-US tariff deal “fundamentally undermined its business position”, as it removed a 19% tariff on US ethanol imports.

The firm’s chairman Grant Pearson said the government needed to come up with a “urgent” solution to save skilled jobs in the region.

A Department for Business and Trade (DBT) spokesperson said it was working closely with the bioethanol industry to understand the impacts of the deal.

The two plants produce bioethanol, which is blended with petrol to produce more environmentally friendly fuels, such as E10 petrol in the UK.

Ensus’s Redcar plant sources feed grain from farms in the UK and Europe to produce about 400 million litres (88 million gallons) of bioethanol each year.

It also sells the byproducts from this process, such as high protein animal feed, to farmers.

The firm said it employed more than 100 people at the plant and that it supported a wider supply chain of about 3,000 people in northern England.

It is understood the influx of US produced bioethanol into the UK would severely undercut Ensus and ABF’s businesses.

Mr Pearson said the loss of the Teesside plant would also mean a “catastrophic knock-on effect in other vital sectors of the economy”.

The UK is already the second-highest destination for US ethanol exports, according to US ethanol lobby group Renewable Fuels Association.

Its head Geoff Cooper said in May: “We are excited about the prospects of expanded market access that will help boost our farm economy, while also delivering lower-cost, cleaner fuel to UK drivers.”

US commerce secretary Howard Lutnick said on X on Thursday that he was looking forward to the UK-US deal becoming “simultaneously active in the coming days”.