Government has temporarily restarted production at the Ensus bioethanol plant in Wilton, Teesside as it warns of supply risks in the UK CO2 market.
Production at the plant ceased last September and was set to close permanently. However, as the UK’s last remaining industrial manufacturer of biogenic carbon dioxide, Ensus agreed to keep the facility on standby to “provide resilience” for critical sectors such as the food industry.
A package of financial support worth around £100 million has been agreed for the plant to remain on stand-by and ready to start up as required. Longer term, regulatory changes could be implemented by the Government that would improve the long-term viability of the UK bioethanol industry.
The Department for Business and Trade said that disruptions to European fertiliser production - combined with difficult market conditions - had significantly reduced the reliability of CO2 imports, and rising gas prices driven by the Iran conflict, plus unplanned maintenance at several European CO2 producing sites, mean that the UK’s market for CO2 risks being undersupplied.
Government said it had been in negotiations with Ensus since September to temporarily retain the plant and its operation, to give it the optionality to restart production when needed. It went on to say that it will continue to monitor market conditions closely and will work with industry, including CO2 suppliers, to manage supply and ensure “value for money” for the taxpayer.
Government also said it would take steps to diversify the UK’s long-term CO2 supply, to strengthen UK resilience and reduce future reliance on imports.
Grant Pearson, chairman of Ensus UK, said: “This agreement of support from the UK Government is excellent news for our employees and those in our extensive supply chain. It strengthens the broader Teesside manufacturing economy and the UK’s resilience in relation to biogenic CO2 supplies. These are vital to food and drinks companies, as well as being important to hospitals, abattoirs and the nuclear industry.
“We hope to have the plant back in full operation soon. This deal will also be very supportive to the UK agricultural and fuel markets including for the future expansion which is required in more sustainable aviation and maritime fuels and in the development of greener chemicals.
“I’d like to thank our loyal employees for their resilience and support during what has been a difficult period and pay particular tribute to MPs Anna Turley and Chris McDonald for their tremendous efforts in making this deal happen.”
“By restarting this plant we’ve acted swiftly to boost the resilience of our supply chains and protect critical UK sectors like food production.”
Business Secretary Peter Kyle
Business Secretary Peter Kyle said: “As a Government of action we will always do what’s needed to ensure resilience and protect British businesses from the worst impacts of global uncertainty. That’s why we intervened last Autumn to keep this critical plant on standby for situations like this.
“By restarting this plant we’ve acted swiftly to boost the resilience of our supply chains and protect critical UK sectors like food production, water and healthcare, as well as the jobs and communities that depend on these industries.”
