Ensus has temporarily stopped operations at its bioethanol plant in Teeside due to competition from US imports and continuing regulatory delays.
Ensus, which operates one of the largest production plants for bioethanol in Europe, with an annual capacity of 400,000 cubic metres of bioethanol and 350,000 tonnes of dried protein animal feed (DDGS), said it had decided to shut down the facility temporarily while “market conditions remain depressed.”
According to Ensus, demand for European-produced bioethanol has slowed due to delays in implementing the EU’s Renewable Energy Directive and approvals of the Voluntary Sustainability Scheme over the last six months. These delays have caused market uncertainty for European producers.
Also, the European bioethanol market has continued to import biofuels – mainly from the US. Ensus said that these imports use loopholes in EU legislation to avoid paying certain tariffs, and also bring bioethanol of “uncertain origin and sustainability” into the European market.
This is not the first time the company has been forced to halt production. In 2011, the Wilton biorefinery closed for several months due to lower than anticipated demand and competition from the US. It shut down temporarily again in April 2013 due to the high cost of wheat.
In a statement, the company insisted that it remains committed to operating and growing its European business, adding that it expected the market to improve in the coming months as implementation of the regulatory framework for biofuels catches up with the agreed EU legislation.
Annual production at the Teeside plant is expected to meet around a third of the UK’s requirement for bioefuels under the Renewable Transport Fuels Obligation.
This news highlights the ongoing problems facing the UK biofuel industry, including increasing imports of bioethanol as US demand slows, as well as uncertainty over agreement on biofuel targets for crop-derived biofuels.
Unfortunately, falling grain prices in the short-term have not been enough to counter this for Ensus. The European biofuel market also places significant demands on ensuring biofuels meet demanding GHG savings, often going beyond the minimum requirement. UK bioethanol suppliers can deliver on this using UK feedstocks, but due to such closures, UK growers are missing out on the chance to supply an important market and help to boost depressed domestic prices. If the current state of the market continues, the UK risks becoming even more dependent on imported biofuels.
Dr J. Tomkinson
Lead Consultant – Biofuels
Tel:+44 (0)1904 435182