UK ethanol producer Ensus to restart amid wider margins, Brexit

Improving margins and uncertainty over the UK’s trading relationship with the European Union have meant a major ethanol producer is to reopen its doors next month, giving a boost to lacklustre feed wheat demand in the country.

“The executive board of Cropenergies AG, Mannheim, has decided to resume ethanol production in its UK plant in Wilton at the beginning of March 2019,” Ensus' owner Cropenergies said Wednesday.

The reopening is well ahead of previous market expectations that the plant would be closed until the end of June at the earliest, with the company saying it expects to start running again “at reduced capacity to supply orders from British customers”.

Cropenergies joined a growing chorus of businesses calling for further clarity on the outcome of Brexit negotiations ahead of the UK’s planned departure from the European Union on March 29.

“Questions related to Brexit regarding customs for imports and exports to and from the United Kingdom need to be clarified immediately,” the company said.

“The future customs regulations are of existential importance for the production site [at] Wilton”.

European ethanol benchmarks have jumped around 15% to €560/mt FOB Rotterdam since Cropenergies first announced the closure of its plant in early October.

Wheat markets, meanwhile, have been on the slide since the start of the month as poor demand and an easing of supply concerns have weighed on prices.

UK feed wheat futures jumped on the news and were up £1.50/mt to £164.50/mt by 1045 London Time.

Ensus can take up to 1-1.1 million mt of UK feed wheat demand each year, although it has the flexibility to use up to 50% corn as feedstock.

Cropenergies used Wednesday’s announcement to put pressure on the UK government and its renewable fuels policy, calling the introduction of a 10% ethanol mandate “overdue for years”.

“For a continuous operation of the plant in Wilton, the development of the local British market for alternative fuels is imperative,” the company said.

The UK’s only other ethanol producer, Vivergo Fuels, shut its doors in September last year, blaming the government’s decision to delay a 10% ethanol mandate into the country’s fuel blend for its decision.