Were you aware of rule changes that came into force from 1st April 2022 about the restriction of red diesel in the UK? Read our blog to find out more and if your industry is affected.
The government introduced legislative changes to restrict the entitlement to use red diesel and rebated biofuels from April 2022 for only the following purposes:
- for vehicles and machinery used in agriculture, horticulture, fish farming and forestry.
- to propel passenger, freight or maintenance vehicles designed to run on rail tracks
- for heating and electricity generation in non-commercial premises – this includes the heating of homes and buildings such as places of worship, hospitals and town halls; off-grid power generation; and non-propulsion uses on permanently-moored houseboats
- for maintaining community amateur sports clubs as well as golf courses (including activities such as ground maintenance, and the heating and lighting of clubhouses, changing rooms etc).
- as fuel for all marine craft refuelling and operating in the UK (including fishing and water freight industries).
- for powering the machinery (including caravans) of travelling fairs and circuses
What is Red Diesel for?
Red diesel was used mainly for off-road purposes, such as to power bulldozers and cranes used in the construction industry, or to power drills for oil extraction. It accounted for around 15% of all the diesel used in the UK.
How Will This Impact Businesses and People in the UK?
The measure was expected to have a negative administrative impact on those businesses and civil society organisations that will lose their entitlement to use red diesel and will need to switch to white diesel, increasing their fuel costs.
This includes sectors such as; construction, mining and quarrying, ports, manufacturing (e.g. ceramics, steel, timber), haulage (for transport refrigeration units on lorries), road maintenance, airport operations, oil and gas extraction, plant hire, logistics and waste management.
Whilst these businesses will need to pay the full duty rate for using white diesel, this measure is expected to incentivise these rebated fuel users to seek to use greener alternatives or use less fuel. One-off costs will include costs in running down or removing red diesel and rebated biofuels from vehicles, machinery and storage tanks, and possibly from selling back any excess red diesel stock to fuel suppliers.
It is not necessary to flush tanks to remove every trace, but it is important to be able to prove that red diesel has not been purchased after the April 2022 deadline, or soon before in order to stock up. It has therefore never been more important to keep receipts and records in good order and make alternative plans ahead of time.
Why Have the Rules Changed?
At Budget 2020, the government announced that it would remove the entitlement to use red diesel and rebated biodiesel from most sectors from April 2022 to help meet its climate change and air quality targets.
Removing most red diesel entitlements aimed to help ensure that the tax system incentivises users of polluting fuels like diesel to improve the energy efficiency of their vehicles and machinery, invest in cleaner alternatives, or just use less fuel. These tax changes should therefore have a positive impact on carbon emissions and air quality.
This measure will be monitored through information collected from fuel duty receipts of red diesel and white diesel, which will help to evaluate trends in fuel usage, and by communicating with affected sectors no longer entitled to use these rebated fuels as well as developers of greener alternatives.
How Can We Help?
The team at CountyClean are here to support the affected sectors through the transition from red diesel.
If you didn’t use up any rebated fuel in your tanks before the 1st of April you must:
- Sell or give the fuel to someone who is still eligible to use it
- Sell or give the fuel to a Registered Dealer in Controlled Oil (RDCO)
- Dispose of the fuel using an approved waste oil disposal or recycling company
If you have rebated fuels and biodiesels that you can no longer use, we can remove any surplus stock from your site safely and dispose of it as waste at one of several licensed disposal facilities. Our team of specialists can provide you with expert advice if you require us to remove any red diesel.
Call us on 01323 741818 or 0800 171 2204 or feel free to get in touch with us via our online contact form.