The Immingham, Lincolnshire plant 'has continued to be negatively impacted by market factors, including slower increases in the UK's biofuels blending mandates compared to European countries and competition from subsidized US-origin products'.
The Immingham facility, which contributes over 25% of the UK’s biodiesel production, has faced difficulties due to slower growth in the UK’s biofuels blending requirements compared to European standards and increased competition from subsidized U.S. biodiesel products. Despite efforts to reduce costs, Greenergy stated that the plant continues to experience adverse market conditions.
Adam Traeger, Greenergy’s Chief Executive Officer, addressed these challenges, stating: “As European countries are updating their mandates in recent months, the UK has fallen quite a bit behind Europe.” He noted ongoing discussions with the UK government to address the policy gap, adding: “We’re not seeing the action that we would like.”
The UK biofuels industry is advocating for higher blending mandates, currently set at 10%, to support domestic production and counter the influx of lower-cost U.S. biodiesel, particularly hydrotreated vegetable oil, following the removal of certain trade duties. Traeger suggested that increasing blending requirements or promoting biofuel use in sectors like maritime and aviation could boost domestic demand.
The competitive pressure has already led one UK ethanol plant to begin scaling down operations due to the impact of U.S. imports. Greenergy plans to offset some of the potential production loss from Immingham by increasing output at its larger Teesside facility. However, Traeger noted that any shortfall may need to be met with imports from Europe or other global producers.
The proposed closure reflects broader uncertainties in the UK’s biofuels market, as the industry seeks stronger government support to remain competitive. Greenergy’s consultation process will evaluate the feasibility of continuing operations at Immingham while exploring strategies to strengthen the UK’s biofuels sector.
The company remains committed to its operations and is focused on adapting to market conditions while advocating for policies that support sustainable energy production in the UK.
