Chamber calls on any new Government to rule out low ‘crop cap’ as future investment in UK’s biofuels industry is put at risk

The Vivergo Fuels plant which could be under threat from a Government "crop cap".

THE Hull & Humber Chamber of Commerce is calling on any new Government after the General Election to rule out imposing a punitive “crop cap” which would threaten future investment in the £1.2-billion bioethanol industry in Hull and the Energy Estuary, part of the Northern Powerhouse in England.

Hull-based Vivergo Fuels, the UK’s largest producer of bioethanol, a crop-based renewable fuel which is added to petrol, is warning that the UK’s bioethanol industry and the thousands of jobs it supports are at risk unless any new Government rules out a recent recommendation to severely limit the amount of crops used to produce fuels such as ethanol via a “crop cap”.

Vivergo welcomed the current Government’s recent proposal to increase renewables in transport, but has major concerns around a “crop cap” proposal. The Department for Transport recently suggested a cap of 2% compared to a European standard of 7%, although it also consulted on a 0% figure.

The Chief Executive of Hull & Humber Chamber of Commerce, Dr Ian Kelly, says: "Vivergo Fuels is a modern, efficient £350-million renewables plant employing 150 skilled staff here in the Humber’s ‘Energy Estuary’. It also has a strong and important agricultural supply chain in the wider area which many more jobs depend on.

“If any future Government is serious about an Industrial Strategy, particularly in the ‘Northern Powerhouse’, then it will need to take a careful and measured approach to changing policies such as the biofuel crop cap. 

“These sorts of policies need to be based on clear evidence and recognising a high crop cap is economically sensible for both British business and British farmers.” 

“Future investors in our renewables sector will not lightly invest in the Humber or elsewhere if confronted by poor and contradictory energy policymaking in Whitehall. 

Vivergo claims a crop cap of 2% or less would not only severely impact on the UK’s ability to effectively implement E10 – a greener fuel containing 10% bioethanol – but it could also lead to the closure of the industry. This would risk thousands of jobs throughout Vivergo’s supply chain, affect the livelihoods of farmers, mainly in Yorkshire and Lincolnshire who sell feed wheat for its production and buy its co-produced protein-rich animal feed, and prevent the UK from meeting its legally binding environmental targets. 

Mark Chesworth, Managing Director at Vivergo Fuels, said: “Any proposed crop cap by a future Government would be a major own goal, undermining a Modern Industrial Strategy, which aims to cultivate world-leading sectors, develop skills, encourage trade and inward investment policy, and deliver affordable energy and clean growth. All of which the bioethanol industry in the Humber and UK is already delivering. 

“It would also deliver a particular blow to the Northern Powerhouse at a time of real economic uncertainty, particularly against the backdrop of Brexit. As one of the Government’s Northern Powerhouse Partners, and during Hull’s City of Culture Year, it would be disastrous for the Government to see companies such as Vivergo, and as a direct consequence, the wider region, suffer. 

“We are calling for a high crop cap. A future Government needs to act and rule out any proposals in this area to prove its commitment to the Industrial Strategy and the Northern Powerhouse while delivering a significant boost to an industry that can deliver growth, jobs, investment and innovation. It will also enable E10 to be effectively rolled out, providing Government with the quickest, easiest and most cost effective solution to decarbonise transport and meet the UK’s challenging targets.”