British Biofuel Firms Sound Alarm Over US 'Green Dumping'

UK biofuel producers are warning of a looming crisis as a flood of cheap US ethanol, subsidised on both sides of the Atlantic, threatens to devastate the domestic industry. At the centre of the dispute is Archer Daniels Midland (ADM), a US agribusiness giant accused of exploiting a regulatory loophole that allows it to benefit from dual subsidies—first at home through the Renewable Fuel Standard (RFS) and again upon export into the UK’s Renewable Transport Fuel Obligation (RTFO) scheme.

Industry leaders are calling this practice “green dumping”: the act of exporting subsidised fuel to foreign markets at prices below the cost of local production, undercutting domestic suppliers who do not benefit from equivalent support. Without swift policy intervention, UK firms say they will be forced to shut down operations, with significant consequences for jobs, emissions targets, and the future of local renewable energy production.

A Sector Under Siege

The UK’s ethanol sector, once viewed as a key player in the country's decarbonisation strategy, is now facing what producers describe as an existential threat. The industry comprises a handful of large-scale plants and supports hundreds of jobs directly, with many more linked through agricultural supply chains. Ethanol from UK facilities is produced primarily from British-grown feedstocks and is used to blend with petrol under the E10 fuel standard.

But this system is now under strain. “The economics of UK ethanol production no longer stack up,” one senior industry executive said. “We’re seeing market share wiped out almost overnight by imported fuel that benefits from taxpayer support at both ends of the chain.”

ADM and the Subsidy Loophole

The core of the controversy lies in how ADM and other US exporters can effectively double-dip into green fuel subsidies. Under the US Renewable Fuel Standard, producers receive credits—known as Renewable Identification Numbers (RINs)—for each gallon of ethanol they produce, whether it is consumed domestically or exported. These credits help reduce the cost of production.

Upon arrival in the UK, the same ethanol is eligible for RTFO certificates, which UK suppliers receive to prove compliance with renewable fuel targets. These certificates also have market value, creating an additional revenue stream. The net effect is a product that arrives in the UK with a built-in price advantage, putting local producers at an immediate disadvantage.

“This is not just a market dynamic—it’s a policy failure,” said a spokesperson for the UK Renewable Transport Fuel Association. “The regulatory framework was never intended to subsidise foreign imports in this way.”

Impact of Import Surge

The consequences of this loophole are already being felt. Ethanol imports from the US have surged over recent months, with UK-based producers reporting price competition they cannot match. Industry data shows that the cost of US ethanol landing in the UK has dropped below the marginal production cost for British suppliers, triggering production slowdowns and contractual losses.

One UK producer said it had recently halted operations temporarily after losing several key supply contracts to importers. “We’re being priced out of our own market by fuel that’s subsidised twice over,” the firm’s managing director said. “It’s completely unsustainable.”

Industry Demands Action

In response, UK producers are urging the government to reform the RTFO framework. Among their recommendations: amending eligibility criteria to exclude imported biofuels that have already received public subsidy elsewhere; tightening certification requirements to prevent arbitrage; and exploring anti-dumping mechanisms under WTO rules.

Trade associations have raised the issue with the Department for Transport, but as of late May, no public statement or timeline for a review has been issued.

“This isn’t protectionism—it’s about ensuring a level playing field,” said an industry source. “British producers are not asking for special treatment. We’re asking for policy coherence.”

Strategic and Environmental Implications

Beyond the economic fallout, there are concerns about what this could mean for the UK’s broader decarbonisation goals. The RTFO was designed to stimulate domestic renewable energy production, reduce transport-sector emissions, and create green jobs. Instead, critics argue, it is now facilitating the displacement of sustainable British fuel with cheaper, foreign-subsidised alternatives.

There are also geopolitical risks. The biofuel subsidy mismatch may become a flashpoint in broader UK–US trade discussions, particularly as environmental regulations and climate finance come under increasing global scrutiny.

“If UK policy allows its own green industry to collapse under pressure from foreign subsidies, it sends the wrong signal to every investor in the low-carbon economy,” said one trade policy analyst.

A Turning Point for Biofuels Policy

The current crisis in UK ethanol illustrates the unintended consequences of fragmented climate policy. While each country designs subsidy regimes to support its own decarbonisation goals, without coordination, such systems can clash, distort markets, and undermine the industries they were meant to nurture.

For UK producers, the next few months will be critical. Without regulatory change, they warn, the country risks outsourcing its biofuel production permanently—and with it, losing control over a key part of its net-zero strategy.

“Subsidies are supposed to build resilience and innovation,” said one producer. “Instead, we’re watching them tear down an industry.”

Author: Ricardo Goulart