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The announcement comes almost two months after the fuel producer closed the Lincolnshire-based site temporarily on poor market conditions.
The company’s chief executive officer Adam Trager said in a statement released on Thursday that the company does not “have enough certainty on the outlook for UK biofuels policy to make the substantial investments required to create a competitive operation” at the Lincolnshire-based plant.
Greenergy’s announcement comes “despite significant cost reductions to improve the plant’s viability”, the company said, adding that the plant has “continued to be negatively impacted by market factors, including slower increases in the UKs biofuels blending mandates compared to European countries and competition from subsidized US-origin products.”
The UK government’s Renewable Transport Fuel Obligation (RTFO) currently mandates that all road transport fossil fuels suppliers provide a set percentage of eligible low-carbon fuel in their deliveries for road and non-road mobile machinery. By 2030, 19.474% of all fuel supplied by fossil fuels companies will be required to be approved low-carbon fuel, according to the Department for Transport (DfT). This compares with 15.673% for 2025.
But in the EU, targets have become more ambitious with the third iteration of the bloc’s Renewable Energy Directive (RED III) targeting a share of 29% of the bloc’s road fuel as coming from renewable sources.
Member states have already started to transpose this into their own national legislation with Germany notably proposing an end to the practice of double counting for biofuels derived from waste-based feedstocks, a move that would likely increase demand as more biofuel would be needed to fulfil the mandates.
The fatty acid methyl ester (FAME) and hydrotreated vegetable oil (HVO) markets in Europe have “suffered” over the past two years, sources told Fastmarkets, and have been threatened and hampered by a combination of cheap imports, low prices and low margins for European producers.
With the UK now outside the EU, it is no longer covered by EU anti-dumping regulations, nor bound by pre-existing limits on imports from powerhouse producers such as the US, whose ethanol exports have also drawn the attention of EU legislators in the past.
As a result, the UK has benefited from access to a greater range of both feedstocks and finished biofuels, but this, according to sources, has potentially come at a cost to the country’s domestic producers.
In particular, market participants have noted the rise of imports of US HVO into the UK — unlike the EU, the country does not place any import taxes on it.
Using HVO can allow companies to hit their blend obligations sooner because the product replicates fossil-based diesel and therefore is not covered by the limitations of the 10% blend wall.
The UK Trade Remedies Authority is currently investigating the inflow of US-origin HVO, and has started requiring imports of the product to be registered.
Previously, imports of HVO shared the same HS code as gasoil or fossil-based diesel.
In light of the recent trade deal signed with the US, which removes a tariff on US bioethanol imports into the UK, chief executives of ABF Sugar — which owns the Vivergo ethanol plant — and competing plant Ensus warned that the facilities faced imminent closure.
Greenergy was acquired by trading house Trafigura in August of last year. It owns and operates the Lincolnshire plant, which produces biodiesel made mainly from waste-based feedstocks, including used cooking oil (UCO).
Although Greenergy does not publicly acknowledge the capacity of its facilities, based on feedback from market sources, the Immingham plant has the ability to produce around 200,000 tonnes per year, Fastmarkets understands.
“We are seeking urgent talks with ministers about increasing the amount of biofuels used in the UK’s petrol and diesel, a move which will help protect the biofuels sector, as well as cutting the UK’s emissions, particularly from heavy goods vehicles (HGVs),” Trager said in the statement.
The company also said that consultation with affected employees would begin as soon as possible and that it was “committed to supporting staff through this period.”
In response to the decision, biofuels trade group Renewable Transport Fuels Association (RTFA) said that the renewable fuels industry “has been taking a battering lately, with subsidised imports coming in to the UK creating an unlevel playing field; and with a lack of ambition on increasing the RTFO targets.”
“RTFA do work with Government – and appreciate the help and support that have been given – but things need to happen much faster if we don’t want to see more UK production plants going the same way as this one,” the organization said in a social media post on July 10.
Thursday’s announcement follows ongoing calls from the sector urging the UK government to take action to safeguard its biofuels industry and protect it from competition from imports and high feedstock costs.
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