Greenergy, a leading European producer of waste-based biodiesel, announced the temporary suspension of operations at its Immingham plant in Northeast England on May 20. The decision comes as the company initiates a review to assess the commercial viability of the facility, citing "significant challenges currently facing the UK biofuels industry." All staff at the Immingham site will remain employed during the review period.

Despite implementing substantial cost reduction measures, Greenergy stated that "market conditions remain unsupportive." This announcement sends ripples through the UK's renewable fuels sector, highlighting the precarious position of domestic biofuel production amidst a complex and increasingly challenging market landscape.

The broader market scenario for biofuels in the UK, and indeed globally, is one of considerable flux. While the global biodiesel market is projected to see strong growth in the coming years, driven by environmental regulations, energy security concerns, and advancements in production processes, the UK's specific situation appears to be diverging. The Renewable Transport Fuel Association (RTFA) and other industry bodies have repeatedly warned of a "catalogue of damaging decisions" that are undermining domestic biofuel manufacturing capacity.

A key factor contributing to the unsupportive market conditions in the UK is the influx of cheap, often subsidized, biofuel imports. Reports indicate that the removal of trade defence measures by the UK on biodiesel imports from the US has led to a surge of subsidized US-made fuels, such as hydrogenated vegetable oil (HVO), flooding the UK market. Furthermore, subsidized and dumped biofuels from China are also displacing UK-produced fuels. This creates an uneven playing field, making it difficult for local producers to compete on price, even after implementing stringent cost-cutting measures like those seen at Immingham.

Another significant challenge is the current regulatory framework. Industry stakeholders point to stagnant Renewable Transport Fuel Obligation (RTFO) targets, which incentivize the supply of renewable fuels, as being insufficient to foster a robust domestic industry. There are also concerns about certain co-products being allowed to "double count" towards meeting RTFO targets, effectively diluting the environmental impact and potentially raising costs for consumers. The eligibility criteria for feedstocks in mandates like the UK's Sustainable Aviation Fuel (SAF) Mandate are also under scrutiny, with calls for them to be expanded to include bioethanol production feedstocks.

The Temporary Closure of Greenergy's Immingham plant follows a similar move by Argent Energy, which closed its Motherwell plant in Scotland last year, citing "unprecedented competition" from Chinese state-subsidized imports and the impact of the removal of trade defence measures.