Among a range of concessions on imports announced on 8 May 2025 as part of the Economic Prosperity Deal between the UK and US, tariff-free access was granted to 1.4billion litres of ethanol from the US.
Bioethanol production in the UK is an industry that doesn鈥檛 make headlines all too often. Despite its perhaps lesser-known status, it creates a significant market demand that has taken delivery of as much as 8% of the total annual British wheat harvest.
However, the recent trade deal agreed by the UK and US has put this market at risk.听
鈥淲hile it might seem a logical step, this extended easement does nothing to support the UK horticultural sector.鈥�
NFU Combinable Crops Board chair Jamie Burrows
UK bioethanol sector at risk
Since its inception, the UK鈥檚 bioethanol sector has become an important customer and supplier to UK agriculture. Adding value to basic commodities, creating supply chain jobs and reducing the UK鈥檚 reliance on fossil fuels.听
AHDB analysis indicates that the volume of UK wheat entering the bioethanol supply chain has been as high as 1.2m tonnes (in 2017 which was approx. 8% of the UK crop), prior to changes to the Renewable Transport Fuel Obligation which artificially capped the UK bioethanol market.听
Despite the value that this industry delivers across the marketplace and within our own cereals supply chain, it has been overlooked and potentially irreparably put at risk by the recent UK US trade agreement. 听
While the agreement sets out to lower costs for manufacturing sectors which use ethanol as a raw material, it could cut off an important market for our members. For that reason, we have reached out to the DBT Secretary of State to call for policy changes which enable more UK wheat to be able to enter the market, and underpin the ethanol supply chain.
'The loss of this market would deliver a huge blow'
With the new tariff changes there is a likelihood that more competitively priced US ethanol imports will be preferred, causing pressure on UK ethanol production.
The UK bioethanol plants currently have capacity to purchase around two million tonnes of wheat each year so many farmers would lose a reliable market for their feed wheat.听
In addition, this may lead to higher animal feed prices as this would not be being produced as a by-product. It is also important to note that other industries and sectors such as the NHS also rely on the carbon dioxide produced in ethanol production.
Should the factories be forced to close due to market saturation from imported ethanol, the loss of this market would deliver a huge blow to our members, not only in Yorkshire and the North East where the majority of UK wheat is sourced, but more widely to UK arable farmers due to the impact on the wheat price in the event that UK farmers are forced to once again look to export markets.听
Government must act
皇家华人has been campaigning for policy changes for over the past few years to address key issues including a greater level of inclusion in road fuels, moving from e10 to e20 fuels, the introduction of a new market section for higher greenhouse gas saving crop-based biofuels as well as increasing the crop cap to its maximum under the RTFO (Renewable Transport Fuel Obligation).
We cannot afford to lose this sector to cheaper imports driven by trade deals that ignore the wider economic and environmental costs. The government must act, not just for the agricultural sector and processors directly impacted, but for the nation鈥檚 food security, sustainability, and energy future.
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