US Imports Undercut UK Biodiesel Factory, Leading to Closure Threat.

Greenergy's biodiesel plant in Immingham, UK is facing closure due to competition from US imports. The plant, which supplies truck fuel recovered from used cooking oil, was unable to compete with cheap shipments from the US. The closure is the latest blow to the region, following the planned closure of the Prax Lindsey oil refinery and the shutdown of Saudi Aramco-owned Sabic's Olefins 6 facility.

Greenergy, a UK-based biofuel producer, has announced its intention to cease production at its biodiesel plant in Immingham, Lincolnshire, following a strategic review of its operations. The decision comes amid persistent market pressures, including slower increases in the UK’s biofuels blending mandates compared to European countries and competition from subsidised US-origin products [1][2][3].

Despite significant cost reductions implemented to improve the plant’s viability, the Immingham facility has continued to face challenges. The plant supplies around a quarter of the UK's biodiesel production and is one of three facilities operated by Greenergy, alongside its facilities in Teesside, UK, and Amsterdam, the Netherlands [2].

Greenergy CEO Adam Traeger stated, “In light of continuing market pressures, we unfortunately do not have enough certainty on the outlook for UK biofuels policy to make the substantial investments required to create a competitive operation at Immingham” [1][2]. The company plans to begin consultation with affected employees as soon as possible and is committed to supporting staff through this period [1].

The closure of the Immingham plant is the latest blow to the UK’s fuel industry, following the recent insolvency of the nearby Lindsey oil refinery, which put 420 jobs at risk [2]. The biodiesel and biofuels industry has faced existential challenges in Europe, with weak market conditions and rising costs affecting operations [3].

Greenergy's announcement comes as the global biofuels sector grapples with market uncertainties. The company, owned by commodity trading giant Trafigura, has been struggling to compete with cheaper US imports. The plant’s closure is expected to have a significant impact on the UK’s biodiesel supply, as it converts waste oils into biodiesel, which is then blended into the conventional diesel to reduce emissions [2].

The UK government has been urged to increase the amount of biofuels used in the country’s petrol and diesel to protect the biofuels sector and cut emissions, particularly from heavy goods vehicles (HGVs) [1]. Greenergy is seeking urgent talks with ministers to address the policy uncertainties that have led to this decision.

The biodiesel plant closure is a stark reminder of the challenges faced by the UK’s fuel industry, which is grappling with market pressures and policy uncertainties. The decision highlights the need for clear and supportive policies to foster a competitive and sustainable biofuels sector in the UK.

References:
[1] https://biofuels-news.com/news/greenergy-proposes-to-end-production-at-its-immingham-biodiesel-plant/
[2] https://www.marketscreener.com/quote/index/S-P-GSCI-BIO-FUEL-INDEX-46869729/news/Greenergy-proposes-to-close-Immingham-biodiesel-plant-60-jobs-at-risk-50475005/
[3] https://oilprice.com/Latest-Energy-News/World-News/Trafigura-Plans-to-Close-UK-Biodiesel-Plant-Amid-Challenging-Market.html