Changes to red diesel in the construction industry

Compass Fuels Delivery Fuel Tanker Wagon Diesel HVO Kerosene Adblue

Here at Compass Fuel Oils, we are the UK’s leading fuel oil specialists, providing next day delivery across the UK. As a result, we have created this guide to everything you will need to know about the changes to red diesel entitlement.

Understanding the changes to red diesel in the construction industry

From the 1st April 2022, red diesel entitlement and laws are set to change, which will have a dramatic impact on the construction industry. But what will these changes mean? Well, there are several aspects to consider:

  • What is changing and why?
  • Which red diesel users will be affected?
  • How can your business stay compliant?

What are the changes to the red diesel industry, and why are the rules changing?

Red diesel is a rebated fuel that was introduced to certain industrial users in off-highway applications, including the construction industry. The changes to red diesel were announced as part of the aims to achieve net-zero carbon emissions by 2050. As such, after the 1st April 2022, most users of red diesel will need to switch to white diesel, and as a result will be taxed to reflect the emissions produced by red diesel and its environmental impact. The aim therefore is to promote the use of cleaner alternatives.

Which red diesel users will be affected?

Many red diesel users will be affected by the change, including the construction industry. In fact, one of the biggest changes for the construction industry is that equipment and heavy plant machinery will not be able to sue red diesel anymore, including  all non-road mobile machinery (NRMM), like excavators, dumpers and cranes. In addition, the construction industry will no longer be able to use red diesel for heating and power generation, including for mobile generators on site. Other industries that will be impacted included:

  • leisure
  • mining and quarrying
  • ports
  • manufacturing
  • airport operations
  • oil and gas extraction
  • waste management
  • commercial heating

How can your construction business stay compliant?

To stay within the new regulations there are some things you can do, including:

  1. Reading the government guidelines- keeping up to date with the government guidelines and the changes to the red diesel regulations is the first step to remining compliant. If your use of red diesel is not on the list of approved applications you will need to seek government confirmation before you make future plans.
  2. Use your red diesel stocks– stockpiling of red diesel close to the date of the 1st April 2022 will not be accepted, and as such you will need to efficiently run down your existing stocks of red diesel by the deadline.
  3. Saving financial records- you will need to prove that you have not purchased any more red diesel after the deadline. This means that you should keep records and receipts for your red diesel transactions.

For all your fuel oil needs, from storage tanks to red diesel deliveries, we are the team you can count on, here at Compass Fuel Oils.