Britain’s biggest bioethanol producer has warned it may be forced to close its flagship plant after claiming that the new UK‑US trade agreement will flood the market with cheaper American imports, undermining domestic production and putting hundreds of skilled jobs at risk.

The company, which operates the UK’s largest bioethanol facility, said the deal’s market access provisions would allow cut‑price US ethanol to enter the UK on favourable terms, squeezing margins at a time when energy costs, feedstock prices and financing costs remain elevated. Management has begun a formal review of the operation’s future, including the option of a full shutdown if the economics do not improve.

Executives argue that British producers are being placed at a structural disadvantage compared with US rivals, who often benefit from lower input costs, larger scale and, in some cases, more generous subsidy regimes. They say that without targeted support or safeguards, the UK risks offshoring both industrial capacity and the associated carbon savings that bioethanol is meant to deliver.

The warning comes just as the government unveils its first comprehensive trade strategy since leaving the European Union. Ministers have promoted the UK‑US agreement as a landmark post‑Brexit achievement that will boost exports and deepen economic ties with Washington. But critics say the threatened closure exposes the tensions between headline trade wins and the on‑the‑ground impact on individual sectors and regions.

Bioethanol – an alcohol made from crops such as wheat or sugar beet – is blended into petrol to reduce carbon emissions from road transport. The UK’s move to E10 petrol, which contains up to 10% ethanol, created a sizeable home market and helped to justify substantial investment in domestic production facilities. The potential loss of the country’s largest plant would leave the UK more reliant on imported fuel additives, potentially from producers with higher lifecycle emissions.

Local political leaders and trade unions have pressed the government to intervene, warning that closure would hit a cluster of supply‑chain firms, from farmers supplying feedstock to logistics companies and engineering contractors. They argue that the plant underpins a broader industrial ecosystem and provides some of the better‑paid, long‑term jobs available in its region.

The government has so far defended the UK‑US agreement as balanced and in the national interest, insisting that overall gains from greater market access will outweigh losses in any specific sector. Officials have pointed to a new trade strategy, set out by Prime Minister Keir Starmer, which promises to protect “vital UK industries” while helping British companies export more around the world.

Nonetheless, the bioethanol dispute is likely to intensify pressure on ministers to spell out what “protection” means in practice. Industry representatives are calling for a mix of tools – including safeguard clauses, targeted support for low‑carbon industrial producers and longer‑term certainty over decarbonisation policies – to ensure that domestic plants can compete on a level playing field.

The episode also highlights the delicate politics of green industrial policy. The government has pledged to accelerate the transition to net zero while rebuilding the UK’s manufacturing base, but critics say poorly designed trade deals risk undermining both objectives if they allow high‑volume, lower‑cost imports to displace domestic clean‑tech production.

Analysts note that bioethanol sits at the intersection of several policy priorities: rural and farming incomes, energy security, transport decarbonisation and regional industrial strategy. The outcome of this dispute, they say, will be watched closely by investors assessing whether the UK offers a predictable environment for long‑term green infrastructure projects.

For now, the plant’s future rests on whether a compromise can be reached that preserves the commercial viability of UK production while keeping the broader UK‑US trade accord on track. Failure to do so risks turning one of the first big tests of the post‑Brexit trade era into a high‑profile example of the costs of liberalisation for parts of British industry.