Argent Announces End of Biodiesel Production at Scottish Facility

Argent Energy, a prominent European biodiesel producer, has initiated consultations regarding its intention to cease production at its biodiesel plant situated in Motherwell, Scotland. Despite the dedicated efforts of its proficient team, external factors impacting the UK and EU biodiesel market have necessitated a strategic shift. This decision, arrived at after extensive deliberation on alternative courses of action, aims to streamline the company's operations towards its better-positioned facilities. Argent Energy is committed to providing support to all affected employees during this transitional phase.

The Motherwell biodiesel plant holds significance in Argent Energy's history, being the site where its journey commenced in 2005, initially producing 45,000 tonnes of waste-based biodiesel annually, and subsequently expanding in 2016. Additionally, Argent operates another plant in Ellesmere Port, situated along the Manchester Ship Canal, and a third strategically positioned in the Port of Amsterdam. Plans are underway to expand the capacity of the Dutch facility significantly.

The consultation process for the employees at the Motherwell facility is anticipated to commence promptly, with Argent Energy actively collaborating with all affected individuals during this challenging period. While the decision to consider the closure of the plant was undoubtedly difficult, adverse market conditions prevailing in the UK over the past two years have compelled this action to safeguard the company's resilience and future sustainability.

Louise Calviou, the Chief Executive Officer of Argent Energy, expressed the arduousness of this decision, emphasizing its necessity in alignment with the company's strategic objectives towards global decarbonization efforts. Despite the setback, Argent Energy and its shareholders remain steadfast in their commitment to ambitious growth plans and the mission to reduce reliance on fossil fuels.

Several external factors have significantly weakened the environment for European and UK biodiesel production. These include intense competition from imported Chinese biodiesel, which benefits from substantial state economic support and subsidies. Additionally, approvals granted by HM Revenue & Customs (HMRC) for major UK fuel suppliers to utilize Inward Processing relief, thus avoiding the standard 6.5% duty for imported biodiesel, have further exacerbated the situation. It's estimated that this practice has resulted in a loss of approximately £150 million in Treasury revenue in 2023 alone.

Furthermore, the removal of trade defense measures by the UK post-Brexit on renewable diesel from the USA, which competes directly with UK biodiesel, has led to a surge in imports of subsidized US-made products. Additionally, post-Brexit regulations have rendered it impossible for the UK to import category 1 tallow – Argent's primary feedstock – from the EU due to EU regulations.

These challenges have collectively strained the biodiesel sector, prompting Argent Energy to collaborate with industry stakeholders and the UK government to address structural imbalances and restore equilibrium to the sector. Meanwhile, ensuring the welfare and support of its employees remains a top priority for Argent Energy amidst these challenging circumstances.