Argent Energy to close biodiesel plant in Motherwell, Scotland, due to market conditions

Photo: Argent Energy

European biodiesel producer Argent Energy announced March 25 that it has entered consultation on plans to end production at its biodiesel plant in Motherwell, Scotland.

“Despite the excellent team and their considerable efforts, external factors affecting the U.K. and EU biodiesel market have driven the requirement to make a strategic change,” the company stated. “The decision, taken only after lengthy consideration of all other options, will concentrate the business on its other, better situated locations. The company is focusing its efforts on supporting all affected employees.”

Argent Energy’s Motherwell biodiesel operation is where Argent Energy’s story started back in 2005 producing 45,000 metric tons (13.5 million gallons) of waste-based biodiesel each year, before later expanding in 2016.

Argent Energy’s second plant in Ellesmere Port is located on the Manchester Ship Canal and its third is strategically positioned in the Port of Amsterdam.

An expansion of the Dutch facility is underway with initial plans to triple capacity.

The consultation for employees at the Motherwell facility is expected to start as soon as possible and Argent Energy will be working closely with all those impacted at this difficult time, the company stated.

“The decision to consult on closure of the plant was not easy,” Argent Energy said. “However, market conditions that have put severe economic pressures on biodiesel production facilities in the U.K. over the past two years have forced the move to ensure the continued strength and future of the business.”

Argent Energy CEO Louise Calviou said, “This has been the hardest decision for us to make and is one we have not taken lightly. After careful consideration of market conditions and our strategic goals for global decarbonization efforts, we believe it is a necessary step we need to take. We and our shareholder remain dedicated to our ambitious growth plans, and our mission to displace as much fossil fuel as possible continues.”

The main external conditions that have substantially weakened the environment for European and U.K. biodiesel production are:

• Unprecedented competition from imported Chinese biodiesel that benefits from state economic support and subsidies.

• Approvals by HM Revenue & Customs for major U.K. fuel suppliers to utilize inward processing relief and avoid the normal 6.5 percent duty for imported biodiesel. This is also estimated to have led to lost treasury revenue of around £150 million (USD4189.6 million) in 2023.  

• The removal of trade-defense measures by the U.K. after Brexit on renewable diesel from the U.S., which competes with U.K. biodiesel. This has resulted in an increase of imports of subsidized U.S.-made product of nearly half a million tons.

• Post Brexit, the inability for the U.K. to import category 1 tallow—Argent’s main feedstock—from the EU, due to EU regulations.

These challenges have taken a toll on the sector as a whole and Argent Energy is working with the industry and U.K. government to solve these structural imbalances and put the sector back on an even footing, preventing further damage to the U.K. industry.

In the meantime, support of its employees is the focus for Argent Energy.