Some Sectors May Struggle After Red Diesel Changes
April 4, 2022
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This year has seen some unwelcome price rises, particularly around fuel, although it isn’t only households who are suffering. Many UK businesses are being squeezed financially after the rules regarding red diesel came in to force on the 1st April 2022. Many companies will find themselves having to pay thousands more for their fuel. This is mainly due to restrictions in the use of red diesel introduced by the government
Red diesel is the same product as white diesel, except for the addition of red dye and the fact that it was taxed at a much lower rate. Vehicles that did not use public roads such as farm machinery, construction equipment and commercial boats could fill up with red diesel. This fuel was taxed at 11p per litre as opposed to the 58p tax paid on normal diesel.
The restrictions are in line with efforts to reduce carbon emissions and achieve strict climate change and air quality targets. The UK government has pledged to ensure that the country is carbon neutral by 2050. They hope that the changes will encourage users of polluting fuels to make sure their vehicles are as energy efficient as possible. Using cleaner alternatives or just trying to cut down their fuel consumption are other options.
Red diesel accounts for approximately 15% of the total diesel used in the UK, producing almost 14 million tonnes of carbon dioxide per year. From 1st April the construction industry and recycling plants will no longer be allowed to use red diesel. Sectors still able to use red diesel include:
- Agriculture
- Forestry
- Horticulture
- Fish farming
- Trains
- Non-commercial heating
- Amateur sports club and golf course maintenance
- Fuel used for UK marine craft refuelling and operating, apart from leisure vessels in Northern Ireland
- Powering the machinery used for travelling fairs