AB Foods holds off bioethanol plant closure decision until June 25

Says Hull plant will stop buying wheat

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Will hold off on all other closure decisions

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Wants UK government to provide support

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Warns "time is very limited" to save plant

LONDON, June 11 (Reuters) - Associated British Foods will hold off deciding the fate of its under threat Vivergo bioethanol plant in Hull, northern England, until June 25, hoping the government will step in with a support package, it said on Wednesday.

The group has 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, has made the operating environment impossible.

A spokesperson for AB Foods said that following a meeting with officials from Britain's business and trade and transport departments on Tuesday, Vivergo will not be purchasing further wheat required for bioethanol production but will hold off all other closure decisions until June 25.

"That short extension is intended to give space for departments to work up options - but time is very limited, and we are clear that any further delay will require financial support from the government," the spokesperson said.

AB Foods wants 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.

It also wants the industry to have access to short-term financial aid of up to 150 million pounds ($202 million).

Bioethanol is produced from crops such as wheat and is used to make petrol greener and to make sustainable aviation fuel. Byproducts include animal feed and carbon dioxide, the latter of which faced severe shortages in 2022.

AB Foods and Ensus, which is owned by Germany's Sudzucker Group and operates a bioethanol plant in Teesside, northern England, together account for nearly all of the UK’s bioethanol production capacity.

Along with supply chain partners, their plants support thousands of jobs.

Britain's concession on ethanol was made in return for the removal of 25% additional tariffs on steel and aluminium, and a quota of 100,000 cars at a duty of 10%. (Reporting by James Davey; editing by Michael Holden, Kirsten Donovan)