One of the last four biodiesel production facilities in the UK is at risk of closure due to the rising competition from subsidized imports from the United States, highlighting ongoing challenges in the biofuels industry.

Greenergy, a company owned by the global commodities trader Trafigura, has announced the temporary halt of operations at its Immingham facility in Lincolnshire. The suspension is part of a strategic review aimed at assessing the plant’s economic viability in light of the significant difficulties confronting the UK’s biofuels sector.

This facility employs 60 workers and produces about a quarter of the UK’s domestic biodiesel output, primarily derived from waste materials like used cooking oils. Biodiesel is mixed with fossil fuel diesel, constituting 7% of the diesel sold at fuel stations nationwide, and contributing to the decarbonization of transportation fuels.

The biofuels industry is voicing concerns over the influx of hydrotreated vegetable oil (HVO), another type of biodiesel, imported from the US, where its production is financially supported. While the EU has imposed protective tariffs on US HVO, the UK lifted similar safeguards in 2022.

A month ago, the UK’s Trade Remedies Authority initiated an anti-dumping investigation to determine whether US HVO imports are being sold at unfair prices or being subsidized, causing damage to the UK industry. This inquiry was prompted by complaints from Greenergy and other local biodiesel producers.

Greenergy reported that despite making considerable cost-cutting efforts at the Immingham site, prevailing market conditions are still unfavorable.

Previously, another biodiesel plant in Motherwell, Scotland, ceased operations last year, citing the effects of the UK’s removal of trade protection measures post-Brexit on renewable diesel imports from the US. This change reportedly led to an influx of nearly 500,000 tonnes of subsidized US biodiesel.

This announcement from Greenergy arrives shortly after leading bioethanol manufacturers in the UK raised alarms about their sustainability being compromised by the same trend of cheap American imports. The UK has recently agreed to eliminate tariffs on US bioethanol, part of a new trade agreement.

Gaynor Hartnell, CEO of the Renewable Transport Fuel Association, emphasized the need for immediate governmental action to preserve domestic renewable fuel production, warning that reliance solely on imports could be detrimental. She noted, “A series of damaging decisions have been made in recent years, all of which could have been avoided and can still be corrected, but time is of the essence.”

A government representative commented that they are aware of the challenges facing the sector and are collaborating closely with stakeholders to understand their concerns and the potential impact on their businesses.