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Industry warns last month's UK-US trade deal will hit

operations

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Seeks short-term financial aid of up to 150 million pounds

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Says thousands of jobs at stake

By James Davey

LONDON, June 3 (Reuters) - One of Britain's biggest

bioethanol producers warned the government on Tuesday that

unless it steps in with a support package for the industry

within the next 12 days it will have to start closure processes

at its plant.

ABF Sugar, part of Associated British Foods ( ASBFF ), and

Ensus together account for nearly all of the UK's bioethanol

production capacity.

"We have 12 days to save this industry," Paul Kenward, CEO

of ABF Sugar, told lawmakers on parliament's Business and Trade

Committee.

Bioethanol is produced from crops such as wheat and is used

to make petrol greener and sustainable aviation fuel. Byproducts

include animal feed and carbon dioxide, the latter of which

faced severe shortages in 2022.

ABF Sugar and Ensus have warned that last month's U.S.-UK

trade deal, which will see the UK's 19% tariffs on U.S. ethanol

fall to zero, on top of existing regulations giving overseas

producers an advantage in the British market, have made the

operating environment impossible.

They have said their plants at Hull and Teesside in northern

England face closure.

Along with supply chain partners, the plants support

thousands of jobs.

Kenward told lawmakers that by June 15 he needed to tell

farmers whether he could sign new contracts for wheat supply.

"Why would I do that unless I have some confidence that the

government's going to step in?" he said.

Kenward called on the government to urgently level the

regulatory playing field, increase the amount of ethanol in UK

petrol from 10% to 15% and support the development of

sustainable aviation fuel.

He also wants the industry to have access to short-term

financial aid of up to 150 million pounds ($203 million).

Kenward said AB Foods had invested 700 million pounds in the

Hull site.

"Once it goes, it goes. Think what that does to future

investors in green industries," he said.

A government spokesperson said business minister Jonathan

Reynolds had met members of the bioethanol sector and senior

officials "continue to consider what options may be available to

support the impacted companies".

($1 = 0.7396 pounds)