18/08/2025

BIZ & FINANCE MONDAY | AUG 18, 2025

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UK will not bail out bioethanol industry

it would shutter the Vivergo plant unless the government stepped in with an aid package, said on Friday it would start an orderly closure process immediately with production of bioethanol and animal feed ceasing by Aug 31. “It is deeply regrettable that the government has chosen not to support a key national asset,” a spokesperson for AB Foods said, adding that the decision threw away Britain’s sovereign capability in clean fuels. “Jobs in clean energy will now move overseas – principally to America but also to other countries with a more sensible regulatory environment,” the spokesperson added. Ensus’ plant will remain open, for the time being at least. Ensus’ plant differs from Vivergo’s in that it also produces carbon dioxide which is used in the soft

quota – a figure equating to the size of the UK’s entire ethanol market. Bioethanol is produced from crops such as wheat and is used to make petrol greener and to produce sustainable aviation fuel. In June, Starmer’s government launched its industrial strategy, promising to invest in the green economy. Britain has two major bioethanol plants in northern England – Associated British Foods’ Vivergo plant and one operated by Ensus, owned by Germany’s Sudzucker Group – which account for nearly all of its production capacity. Both groups have said the trade deal, along with existing regulations that already gave American producers an advantage in the British market, had made the environment impossible. AB Foods, which had said in June

drinks, packaged foods and nuclear industries and in hospitals. Ensus produces up to 60% of the UK’s annual needs. Grant Pearson, chairman of Ensus UK, said the government was looking at options to secure an ongoing supply of carbon dioxide from its facility. “Urgent discussions will be taking place to provide a level of assurance to the Sudzucker and CropEnergies Boards that there is a very high level of confidence that an acceptable long term arrangement can be reached,” he said. CropEnergies is another unit of Sudzucker. Separately, the government said it was looking at increasing the amount of ethanol in UK petrol from the current 10% to assist the industry, though that will come too late for Vivergo. – Reuters

o British government says aid will not provide value for taxpayer

LONDON: Britain’s government will not provide financial support to the struggling bioethanol industry, it said last week, leaving a sector hit hard by the UK’s tariff deal with US President Donald Trump facing imminent collapse. The failure of the industry, which supports thousands of jobs, could prove to be an embarrassment for Prime Minister Keir Starmer, who hailed May’s trade deal as a boost to businesses that would protect employment and attract investment. It would also serve as a stark example of the global impacts of Trump’s assault on world trade, with the industry’s collapse set to deal a

blow to production of byproducts including animal feed and carbon dioxide as well as the British farmers who supply the sector. “We ... have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces,” a government spokesman said last Friday. The spokesperson said the trade deal had protected hundreds of thousands of jobs in the auto and aerospace industries. However, under the agreement, the UK’s 19% tariffs on US ethanol fell to zero, through a 1.4 billion-litre

Starmer speaking with a guest with his wife Victoria (right) during a national service of remembrance at the National Memorial Arboretum in Alrewas, central England, to mark the 80th anniversary of VJ (Victory over Japan) Day and the end of World War II. – AFPPIC

EU push to protect digital rules holds up trade statement with US: FT

Petrobras mulls investment in Raizen to re-enter ethanol market

SAO PAULO: Brazilian state-run oil firm Petrobras is considering an investment in sugar and ethanol producer Raizen as a way to re-enter the ethanol market, O Globo newspaper reported on Saturday, citing sources. Petrobras had previously said it was eyeing a return to the ethanol sector after having announced in its 2017-2021 strategic plan it would no longer produce biofuels, while Raizen is open to a new partner as it faces financial hurdles. O Globo said Petrobras could make a decision by year-end. The oil company is studying several options, including joining Raizen as a partner or buying assets from the firm, the report added.

Raizen, the world’s largest sugar maker and a leading ethanol producer, is controlled by Shell and Brazilian conglomerate Cosan. The company also has businesses in the fuel distribution sector. Raizen earlier this week acknowledged the possibility of a new shareholder after reporting weak results, which caused its stock to plunge to a record low. Cosan said bringing in a new partner for the company was “an option we like”. Raizen has been facing operational challenges and high debt. Recent measures put in place to reduce leverage included divestitures and shutting down a mill. – Reuters

BRUSSELS: The European Union is trying to prevent the United States from targeting the bloc’s digital rules as both sides work through the final details of a delayed statement to formalise a trade deal reached last month, the Financial Times reported yesterday. EU officials said disagreements over language relating to “non-tariff barriers”, which the US said include the digital rules, are among the reasons for the hold-up of the statement, the newspaper said. Reuters could not immediately verify the report. The European Union, the White House and the State Department did

not immediately respond to a request for comment. The statement had originally been expected days after the July announcement by EU President Ursula von der Leyen and US President Donald Trump, according to FT. The July deal imposed a 15% import tariff on most EU goods – half the initially threatened rate – and helped avert a broader trade war between the two allies, who together account for nearly a third of global trade. The US wanted to keep the door open for possible concessions on the EU’s Digital Services Act (DSA), which Washington says stifles free speech and imposes costs on US tech

companies, according to FT, which added that the commission has said that relaxing these rules is a red line. The EU’s DSA is a landmark law meant to make the online environment safer and fairer by compelling tech giants to do more to tackle illegal content, including hate speech and child sexual abuse material. The commission had anticipated that Trump would sign an executive order by Aug 15 to cut tariffs on EU car exports to the US from 27.5% to 15%. However, a US official signalled that this would be delayed until the joint statement was finalised, according to FT. – Reuters