DEPARTMENT of Transport proposals to limit the amount of crops used to produce fuels such as ethanol would deliver a "devastating blow" to economic recovery outside urban areas, according to the UK's biggest wheat buyer, Hull-based Vivergo Fuels.

The government wants to see more renewable fuel sources used in transport, but has sought to put the focus on waste and byproduct feedstock by proposing a "crop cap" limiting the percentage of total crops grown that could be used in fuel production. The figure on the table now is 2%, which is low compared to the European standard of 7% – but the DoT has also consulted on going as low as 0%.

Vivergo has been working on creating a supply chain for E10 – a greener fuel containing 10% bioethanol – but is now concerned the crop cap could stop that plan dead in its tracks, risking renewable sector jobs, while also hurting farmers that sell feed wheat for its production and buy its co-produced protein-rich animal feed.

Company managing director Mark Chesworth said: “As the UK’s biggest wheat buyer, we offer a 365-day demand for the UK’s arable farmers – providing a new sales channel, often giving more competitive rates for their feed-wheat in comparison to exporting. But the Government risks severely hampering the industry if it moves towards a low crop cap.

“The Government’s proposed crop cap would be a major own goal, undermining the Modern Industrial Strategy, which aims to cultivate world-leading sectors, develop skills, encourage trade and inward investment policy, and deliver affordable energy and clean growth. All of which the bioethanol industry in the UK is already delivering.

“It would be disastrous for the Government to see companies such as Vivergo, and as a direct consequence, the wider region, suffer," said Mr Chesworth.

“We are calling for a 7% crop cap. The Government needs to act and reconsider its proposals to prove its commitment to the Industrial strategy and the Northern Powerhouse whilst delivering a significant boost to an industry that can deliver growth, jobs, investment and innovation. It will also enable E10 to be effectively rolled out, providing Government with the quickest, easiest and most cost effective solution to decarbonise transport and meet the UK’s challenging targets."