AB Foods postpones UK bioethanol plant closure decision by 24 hours

LONDON, June 24 (Reuters) - Associated British Foods ABF.L has extended its deadline for deciding the fate of its Vivergo bioethanol plant, which is under threat of closure, to Thursday, hoping the UK government will step in with a support package.

The company on June 11 had set a deadline of Wednesday before it starts redundancy consultations for the 160 staff at the plant in Hull, Northern England, if no deal was achieved with the government to soften the impact of last month's U.S.-UK trade deal.

Under the deal, the UK's 19% tariffs on U.S. ethanol will fall to zero, through a 1.4 billion-litre (370 million gallon) quota - a figure equating to the size of the UK's entire ethanol market today.

AB Foods and Ensus, which is owned by Germany's Sudzucker Group and operates a bioethanol plant in Teesside in Northern England, have warned that the trade deal, along with existing regulations that give U.S. producers an advantage in the British market, has made the operating environment impossible.

"At the request of the government, ABF has agreed to postpone Vivergo closure decisions for 24 hours while discussions continue on the appropriate process for resolution of the issues facing the UK bioethanol industry," an AB Foods spokesperson said.

Ensus and Vivergo 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%.