Ensus, Vivergo to lead rebound in EU ethanol output this year


The ramp-up in ethanol production by the UK's Ensus and Vivergo plants, which has driven the country back to net imports in wheat, will lead a bounce in European Union output of the biofuel to a record high.

However, in feedstocks, it is corn and sugar beet - rather than wheat, which is more usually associated with the UK plants - which will see demand raised by the return to increasing ethanol output.

US Department of Agriculture bureaux in Europe pegged at 6.29bn litres EU output of ethanol this year, a rise of 209m litres year on year, and a record high.

Indeed, the increase will more than reverse a drop last year, the first production decline in at least nine years, which the bureaux attributed to "financial problems within the sector", with 2016 notably marked by the fallout from the collapse of Spanish-based Abengoa late in 2015.

Dutch, UK recoveries

Spain's own ethanol output was forecast falling further this year, by 48m litres to 280m litres, taking to 43% the slump in the country's volumes since a 2015 high.

The Balbilafuente plant in Salamanca, for instance, was reported this week to be once again taking deliveries of cereals, after being mothballed since March last year.

However, output in the Netherlands, which was affected last year by the closure of an Abengoa site, was seen recovering this year by 19.1% to 530m litres.

And in the UK, output will soar 23% to a record 815m litres - reinforcing the country's status as the EU's third-ranked producer behind France and Germany- "due to increased use of existing capacity" at the Ensus and Vivergo sites in northern England.

Margin recovery

The comments follow an upgrade by CropEnergies, the owner of Ensus, to its profits forecast, thanks largely to the reopening of the site after a period offline because of weak margin prices.

European ethanol prices had also been higher than expected, CropEnergies added.

Elevated margins are also reported to have boosted production the nearby Vivergo plant, owned by Associated British Foods after a maintenance period in January and February.

Indeed, the raised demand for raw materials from ethanol plants was cited as a prime cause of a forecast last week for the UK to return being a net wheat importer in 2016-17.

Corn vs wheat

Wheat is the default feedstock for both Ensus and Vivergo, part of whose rationale for construction in the UK was the country's large production of lower-quality wheat, although the plants were sited close to ports to allow imports too.

Still, the USDA bureaux forecast, EU-wide, corn extending its lead as the best-used cereal in the bloc for ethanol production, with consumption of the grain viewed as rising by nearly 250,000 tonnes in 2017 to a record 5.68m tonnes.

Wheat volumes, by contrast, were seen easing by some 140,000 tonnes to 3.89m tonnes.

Ensus has ability to use corn in its production, with corn also the preferred grain "in the Netherlands… where the majority of the ethanol plants are located at sea ports, and the corn is predominantly sourced from the Ukraine".

Beet recovery

Use of sugar beet in making ethanol will rebound, by some 960,000 tonnes to 9.79m tonnes, with the boost to sowings of the crop provided by deregulation of the EU sugar industry.

"Despite the relatively high sugar prices, use of beets for ethanol production is expected to recover.

"Bioethanol produced from sugar beets faced tough competition from decreasing grain prices, and as a result fell during 2013-16."


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