UK’s Vivergo enters maintenance on weak ethanol, legislative angst cocktail

14 Nov 2017 | Andrew Goodwin

The UK ethanol production company Vivergo has announced it is bringing forward maintenance at its Humberside facility citing a cocktail of low ethanol prices on the international market and a perceived lack of clear legislative ambition in the UK’s biofuel policy.


The facility, which opened in 2012 and primarily takes feed wheat to produce ethanol, will enter maintenance at the end of November and will monitor market conditions before making a decision around restarting.


Citing a fall in ethanol prices over the last six weeks, the company, which is owned by AB Sugar, contrasted the fall in ethanol prices with the UK government’s failure to adopt an E10 rollout within the UK fuel network.


“We… have remained extremely concerned that there is no roll-out framework for E10 in the UK, the absence of which could have serious consequences for the long-term future of the UK bioethanol industry.


E10 refers to a petrol blend that incorporates up to 10% ethanol into the final road fuel mixture.

Feedstock prices are unlikely to have factored into the decision as delivered feed wheat prices into North Humberside have fallen since the start of the marketing year, falling 7.4% between July and November to £143.50/mt, according to data from UK farming agency AHDB.  


Instead, low ethanol prices are weighing on the company, with the press statement referring to a fall in ethanol prices over the last six weeks.

According to data from the CME, the November contract for T2 ethanol delivered into Rotterdam has fallen from just under Eur492/cu m in mid-September, to hit Eur446/cu m by late October and early November.

While values have recovered since then, Vivergo has the double impact of having to price the ethanol it produces in euros, while the feedstocks are purchased in pound sterling meaning the company carries exposure to the fortunes of the pound on international currency markets.

The pound has undergone a rollercoaster ride against the euro and other currencies since the UK referendum on membership of the European Union back in June 2016.


A spokeperson for Vivergo confirmed that the maintenance has been brought forward and extended, effectively confirming an open ended period pending market developments.

“When all maintenance activity has been completed and tested, we will make a decision on when to restart the plant,” the statement said.

The UK government has signalled its willingness to introduce an E10 requirement, but had highlighted concerns over the lack of a mechanism to facilitate its introduction.