Red Diesel – changes to its use in construction
Red Diesel changes are coming into force on 1st April 2022
What is happening?
New legislation surrounding the use of rebated diesel and rebated biofuels will be coming into force in the UK in April. This will affect a number of industries, including construction.
To reduce the impact of fossil fuels on the environment, and reach its Net Zero target by 2050, the government has introduced legislative changes to restrict entitlement to use rebated diesel and rebated biofuels.
Therefore, as of the 1st April 2022, some sectors will no longer be able to use rebated diesel (commonly known as Red Diesel) or rebated biofuels. Instead, these industries will need to use diesel or biofuels for which the full rate of fuel duty has been paid.
By taxing the fuel at the full-rate, the government’s intention is that it will more fairly reflect the amount of emission produced with the hope that the take up of more environmentally-friendly alternatives increases.
What is Red Diesel?
Red diesel or rebated diesel is a type of gas oil that cannot be used as fuel in road vehicles but can currently be used for other purposes such as off-road vehicles, plant equipment, stationary engines, mobile machinery, boats, and heating. Users are entitled to a tax rebate on the fuel purchased.
FYI – red diesel is the same as regular white diesel but is called red diesel as it must be marked with an identifying red dye to ensure it is not used in standard road vehicles.
When do the changes come into effect?
1st April 2022.
Does it impact construction?
Yes, it does. The construction industry is not exempt and will not be able to use rebated diesel or rebated biofuels from the 1st April 2022.
“All off-road plant and machinery currently using Red Diesel as fuel, unless identified as exemptions“*
HMRC
This includes not being able to use up existing stocks that may have been purchased prior to the deadline. Companies need to run down their rebated diesel stock before the 1st April. According to Fuel Expert Nicki Holt in a helpful article for The Construction Index:
“In order to stay compliant, it will be essential to run down your existing stocks of red diesel before the 1st April 2022 deadline. In most cases that doesn’t mean you must remove every trace by flushing your tanks. However, you will need to be able to prove that you haven’t purchased any red diesel after the April 2022 deadline or stockpiled close to this date.”
Nicki Holt, The Construction Index
Businesses should make sure that they keep documentation proving their vehicles or equipment were filled with the correct fuel, for example invoices or receipts that can provide proof of purchase.
What are the consequences of non-compliance?
HMRC have the power to issue a £250 fine and seize the machine or vehicle in question. They may also decide to issue a penalty of up to 100% of the fuel duty avoided by using Red Diesel.
What can I use as an alternative ?
In addition to standard white diesel, greener alternatives are available. For example, Shell GTL (gas to liquid) or HVO (Hydrotreated Vegetable Oil).
HVO produces significantly less harmful emissions than standard diesel, generating up to 90% less CO2 e.
IMPORTANT: CHANGES TO THX STOCK
THX will be replacing its FuelBox Red Diesel and FuelBox Green D+ HVO Off Road with:
1. FuelBox Derv / White Diesel (20L)
U.N. Approved, Pre-filled 20 Litres of Derv/White Diesel in a bag-in-box.
Each box contains our special formulated 10+ additive achieving outstanding performance over conventional Diesel. With improved cetane ratings, combustion efficiency and reducing visual emissions with giving each box a 2 year shelf life.
2. FuelBox Green D+HVO White Diesel replacement (20L)
U.N. Approved, Pre-filled 20 Litres of Green D+HVO White Diesel Replacement.
Green D+ HVO is renewable, biodegradable (by 51 days) and is made from 100% renewable materials. It is a direct drop in replacement for diesel and can be used in all diesel engines.
don’t forget!
Don’t forget you will need to use up any outstanding rebated diesel (red diesel) and rebated biofuel before the 1st April deadline to ensure compliance.
Further Reading
*Government Guidance: Changes to rebated fuel entitlement:
