Red diesel is due to be restricted even further in the coming weeks in changes likely to impact many businesses.
Also known as rebated diesel, red diesel is a standard form of fuel that gets blended with red dye to help mark it out from regular white diesel.
Its use is heavily regulated and users must sign an RDCO when they buy it. Red diesel has a lower tax duty, with users paying 11.14 pence per litre compared to the fuel duty rate of 57.95p per litre for regular diesel.
Red diesel has been used by the construction and infrastructure industries predominantly for off-road vehicles. While it is not being scrapped entirely, the ways it can be used are due to be restricted in the interest of the environment.
When are red diesel rules being changed?
The new rules are set to come in on April 1 and will also affect rebated biofuels, meaning they won’t be able to be used in many of the ways they currently are.
This means many drivers will need to use regular diesel. While this may mean an increase in price, a variety of options including renewable diesel alternatives like Hydrotreated Vegetable Oil (HVO) or taking the leap to electrify or decarbonise operations are also on the table.
Why are red diesel rules being changed?
Targets to cut down on fuel were introduced in the 2020 budget as part of the government’s efforts to meet net-zero emissions targets.
The government aims to have reduced net greenhouse gas emissions in the UK to zero by 2050, which has led to a spate of policies being introduced to help the nation lower pollution rates.
Red diesel emissions from the infrastructure and construction industries are thought to have contributed around 7% of London’s nitrous oxide emissions and 8% of PM10 emissions, which is a type of particulate matter, the Express reports.
Other policies have been introduced in an attempt to positively drive change in the UK towards its emissions targets.
One such policy was the introduction of E10 petrol into the nation’s pumps, a clear effort to help decarbonise the UK.
Some businesses have called on the government to halt plans to ban red diesel, citing fears of increased operating costs.
The Road Haulage Association’s Rod McKenzie said the “red diesel hike tax is damaging to [hauliers’] business”.
What are the red diesel rule changes?
From April 1, red diesel will no longer be available for non-road mobile machineries such as diggers and cranes.
Other equipment such as generators will also be banned from using it. These machines will now need to be filled with full duty-paying fuel.
The government says that red diesel makes up around 15% of the diesel used in the UK, with the ban an attempt to reduce this dependency and push businesses towards more environmentally friendly options.
The current consumption of red diesel costs around £2.4 million in revenue compared to diesel charged at the standard rate.
