At the 2020 budget, the UK Government announced that it would remove the entitlement to use red diesel and rebated biodiesel from most sectors from April 2022. This is to help meet its climate change and air quality targets. The tax changes will ensure that most users of red diesel use fuel taxed at the standard rate for diesel from April 2022. Here is a link to the summary of the consultation to the ‘Reforms to the tax treatment of red diesel and other rebated fuels’
What’s the difference between Red Diesel and Road Diesel also known as White Diesel or DERV?
Red diesel or Gas Oil is chemically the same as white diesel (DERV – Diesel Engine Road Vehicle) used in normal road-going cars and vehicles, but the red diesel is dyed red and has less fuel duty. At the time of writing this article white diesel for use on-road vehicles has 57.95 pence per litre fuel duty. Red diesel has a fuel duty of 11.14ppl. Red diesel can only be used in off public road applications.
This typically includes:
- Agriculture, forestry and farming.
- Construction site machinery
- Diesel engine generators
- Commercial and pleasure boating
- Heating and hot water oil-fired boilers
- Fuel for forklift trucks and machinery used on private land.
Who can still use Red Diesel after April 2022?
A frequently asked question is “who can still use red diesel after 1st April 2022?”
According to the Government website the following sectors can still use rebated red diesel.
Agriculture, Horticulture, Fish farming & Forestry
In these sectors, rebated fuel can be used for ‘accepted purposes’ such as:
- Agricultural vehicles
- Special vehicles
- Unlicensed vehicles
- Certain machines and appliances
You can use red diesel fuel in agricultural vehicles when:
- Cutting verges and hedges that border a road
- Snow clearing
- Assisting any clear-up following flooding
Vehicles that are used on railways but not tramways.
Non-commercial electricity generation and heating.
- Domestic heating for homes.
- Places of worship – Heating Churches.
- NHS hospitals, heating and generators.
- State schools, not private schools, as these are considered commercial.
Community amateur sports clubs (CASCs) and golf courses
A CASC means a club that is registered as a community amateur sports club.
You can use rebated fuel in agricultural vehicles and unlicensed vehicles kept and used on:
- Land maintained by a CASC
- Golf courses
- Golf driving range
You can also use rebated fuel in any machines or appliances (other than vehicles) being used in these venues. This includes heating and lighting buildings, such as clubhouses and changing rooms.
When you’re working on these grounds, you can use rebated fuel in special vehicles, such as:
- Mowing machines
You can also use rebated fuel in special vehicles when the vehicle is going to or from a golf course or land maintained by a CASC, where the vehicle is used.
Where the land or golf course is either side of a public road, you can use rebated fuel in an agricultural or special vehicle while travelling between the 2 parts by the shortest possible route, providing the vehicle is licensed to use the road.
Sailing, boating and marine transport
Except for private pleasure craft in Northern Ireland.
This includes in their engines and in other machines and appliances permanently on the boat.
Since 1 October 2021, you cannot put rebated fuel into the fuel supply of the engine of a private pleasure craft in Northern Ireland.
If you buy rebated fuel for private pleasure craft in Great Britain, you will be required to pay the additional duty on the proportion of the fuel you will use to propel the craft.
Travelling fairs and circuses
You can use rebated fuel in machines and appliances to:
- power rides
- provide electricity and heating for caravan accommodation
You can use rebated fuel in a mowing machine or unlicensed vehicle.
What are the alternatives to Red Diesel?
The government has changed the red diesel rebate rules to encourage fuel users to use low carbon alternatives to help reach the UK’s goal of net-zero by 2050.
You will need to switch to full duty paid white diesel or HVO to continue running the same machinery. If you use red diesel or gas oil for heating, you may be able to convert your boiler burner to use different heating oil. Contact your fuel supplier for more details.
HVO (hydrotreated vegetable oil) is a greener alternative to fossil fuel diesel. HVO is made from 100% renewable oil stock materials that reduce net greenhouse gas emissions by up to 90%. Adhering to both the EN 15940 and ASTM D975 specifications, accepted by the Road Transport Fuel Obligation and certified by the ISCC, HVO fuel can be used as a drop-in replacement for both white and red diesel. Requiring no changes to the engine or operational infrastructure. Storage tank and pump manufacturers are certifying their equipment as HVO ready as demand for the new fuel increases.
If you use red diesel now and need to switch to alternative diesel fuel, you need to use your stock before 1st April 2022. It would be best practice to clean the tank and replace filters to minimise contaminating the red-dyed diesel with white diesel. But keep all your fuel receipts and a log of delivery dates so you have a complete record of your fuel transaction.
This article was written with the best knowledge at the time of writing. Please check the government website for updated information and rules. Tank Services will not be held responsible for inaccurate content or repercussions of the information in this article.