In case you weren’t aware, the government have announced some major changes to fuel regulations surrounding red diesel. These changes will involve the removal of the right to access red diesel and other rebated fuels and biofuels. As the most widely used, this will affect red diesel users the most.
Standard white diesel for use in diesel engine road vehicles is subjected to a fuel duty of 57.95 pence per litre (ppl), while red diesel currently benefits from a fuel duty rebate of 46.81ppl, essentially reducing the tax charged on red diesel down to 11.14ppl, which accounts for a tax reduction of slightly over 80%. The new proposed legislation will remove the entitlement of purchasing red diesel from many industries.
These changes are due to take place on 1st April 2022 in time for the next tax year. These new regulations are being enacted in support of the government’s net zero initiative to half and help reverse climate change and its damaging effects on our planet. The UK has pledged to achieve a carbon neutral society by 2050, which has prompted this and many other measures. The primary focus of this new legislation is to aid in the reduction of fossil fuels being burned within the UK by industries thought to be major contributors to carbon emissions.
The new legislation will primarily affect the construction industry, with the majority of red diesel being used for off road construction machinery. The government have also allocated a list of industries which will be exempt from these changes and still allowed to use red diesel at rebated fuel duty rates, these include:
- Agriculture, Horticulture, Fish Farming & Forestry
- Public Sector
- Amateur Sports Clubs & Golf Courses
- Non-Commercial Heating & Non-Commercial Power Generation
- Travelling Funfairs and Circuses
The full detailed list can be viewed here.
In short, if your industry currently uses red diesel and isn’t specifically named in the list of exemptions to the upcoming changes, you will have to cease all usage of red diesel by the end of 31 March 2022, and red diesel users will have to flush out their tanks before they switch over to white diesel to avoid contamination!