Bloomberg News

Ensus to Halt U.K. Ethanol Plant on Adverse Market, Wheat Crop

April 03, 2013

Ensus Ltd., a U.K. producer of ethanol from wheat, will temporarily halt its plant in Teesside, England, after less than nine months of operations due to “adverse market conditions” and a poor local harvest.

The European ethanol market is “challenging” as prices for the fuel have risen less than input costs, Ensus wrote in a statement e-mailed today. Rising gas prices have lifted costs considerably, the Yarm, England-based company said.

Ensus restarted the plant, which can process more than 1 million metric tons of wheat a year, in August after a 15-month halt. That coincided with U.K. farmers harvesting their smallest wheat crop in five years after a wet summer, threatening to turn the country into a net importer of the grain for the first time in 11 years.

“Unfortunately market conditions are working against us at the moment,” Peter Sopp, the chief executive officer of Ensus, said in the statement. “Ensus remains confident in the long- term future of the biofuels sector.”

Ensus said it doesn’t know when the wheat-to-ethanol plant will restart. The company said it’s “deeply frustrated’ by the slow development of U.K. and European markets, and continued government support for biofuels is critical.

‘‘We hope that market conditions can improve and are working towards the plant becoming operational again in the near future,’’ Ensus wrote.

The poor wheat harvest in the U.K. had an adverse effect on the quality and prices of feed wheat used in the plant, according to Ensus. The country’s wheat production fell 13 percent last year to 13.3 million tons, government data show.

Shell Oil

Ensus’s Teesside plant makes livestock feed and carbon dioxide as by-products of ethanol manufacturing. The company, which has about 100 employees, can produce about 400 million liters (106 million gallons) of ethanol annually and is a supplier to Shell Oil Co, according to its website.

‘‘This will be the loss of an important source of high quality, locally produced animal feed and a home for U.K. wheat,” James Mills, crop adviser to the National Farmers Union, wrote in an online statement. “The value of this industry was felt by many cereal growers following a poor harvest in 2012 with an increase in lower-quality feed wheat.”

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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