UK's Vivergo to restart bioethanol production in view of new RTFO

Vivergo’s 420 million litre/year bioethanol plant in north-eastern England will restart production after a four-month shutdown, in view of recent government legislation to raise the mandate for biofuels, the company said in a statement on Tuesday.

The producer, which is owned by ABF, did not specify the timing of the restart or whether the plant will operate at full capacity.

Vivergo mothballed the Salt End plant, near Hull, last December, citing government inertia on biofuels policy, the rising cost of wheat and falling prices for ethanol in Europe as reasons why production had become uneconomic.

In March, the UK’s House of Lords (the upper chamber of parliament) revamped its Renewable Transport Fuel Obligation, which Vivergo said had helped enable a restart.

“We are pleased to see the RTFO pass through Parliament. This step, combined with the completion of maintenance work, has prompted us to recommence production after being offline over the winter period,” Vivergo's managing director Mark Chesworth said in the statement.

Richard Royal, Vivergo's head of government affairs, explained that was vital for Vivergo to get the RTFO passed through Parliament before the ‘new year’ of RTFO targets that go into force in April. In December, it looked like this may not happen, he said.

"Inevitably such uncertainty has an impact upon business planning," Royal added. 

The reviewed RTFO, to come into effect from April 15, commits the UK to increasing the contribution of biofuels in the overall fuel mix from 4.75% to 7.25% in 2018, rising to 12.4% by 2032.

However, the company pointed out there is “much still to do” as it urged a mandate for E10, which is petrol blended with 10% bioethanol.

A government framework for E10 was omitted from the new RTFO, in line with a longstanding policy that responsibility for introducing the blend lies with fuel companies.

Fuel companies, in turn, say that the government needs to give official blessing and encouragement to E10 before they can start blending it and offer it for sale on forecourts.

Chesworth said that having got the RTFO passed, the company's focus is on getting E10 introduced in the UK by the end of the year.