According to Argent Energy, the consultation for employees at the Motherwell facility is expected to start as soon as possible and it will be working closely with those effected.
Factors
The company has announced that its decision to start a consultation process ceasing biodiesel production in Scotland was down to external factors that have exerted severe economic pressure on the UK and EU biodiesel market.
One of the main external conditions affecting the European and UK biodiesel production industry, Argent Energy goes on to explain, is the competition it faces from imported Chinese biodiesel. Chinese biodiesel benefits from state economic support and subsidies, intensifying competition for domestic producers. This influx has saturated the market and led to pricing pressures, making it increasingly difficult for European and UK biodiesel producers to remain competitive.
Furthermore, HM Revenue & Customs (HMRC) approvals allowing major UK fuel suppliers to utilise Inward Processing Relief have exacerbated the challenges. This relief enables suppliers to bypass the standard 6.5% duty for imported biodiesel, creating an uneven playing field for domestic producers. Not only does this disadvantage local biodiesel producers, but it also potentially results in lost revenue for the Treasury.
The removal of trade defence measures post-Brexit has also significantly impacted the industry. The UK’s decision to lift these measures on renewable diesel from the USA has led to an influx of subsidized US-made products, directly competing with UK biodiesel. This policy change has worsened the challenges faced by domestic producers, diminishing their market share and profitability.
Post-Brexit restrictions on importing Category 1 tallow from the EU have disrupted the supply chain for UK biodiesel producers. EU regulations have limited the UK’s access to essential raw materials, potentially constraining production capacity and increasing costs.
Decision
Chief executive officer, Louise Calviou, said: “This has been the hardest decision for us to make and is one we have not taken lightly. After careful consideration of market conditions and our strategic goals for global decarbonisation efforts, we believe it is a necessary step we need to take. We and our shareholder remain dedicated to our ambitious growth plans, and our mission to displace as much fossil fuel as possible continues.”
Facility
The Scottish plant is the company’s first plant producing 45,000 tonnes of waste-based biodiesel each year, before later expanding in 2016. It also has facilities in Manchester and the Port of Amsterdam.
To find out more about Scottish plants, visit LARAC Scotland. To book tickets to attend or for more information please click here.
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