Be prepared: Red diesel rules are changing

Be prepared: Red diesel rules are changing

From 1 April 2022, the rules surrounding rebated diesel (also known as red diesel) and rebated biofuels are changing. Make sure you are in the know:

What is red diesel?

Red diesel is the same as regular diesel but intended for registered off road vehicles and machinery only. It is dyed red, to help identify illegal use. Red diesel is taxed at a lower rate and there are legal requirements about when and how you can use it.

What’s changing?

From 1 April 2022, we will only be able to supply red diesel for the following applications (as stated by

  • for vehicles and machinery used in agriculture, horticulture, fish farming and forestry. This includes allowing vehicles used for agriculture to be used for cutting verges and hedges, snow clearance and gritting roads
  • to propel passenger, freight or maintenance vehicles designed to run on rail tracks
  • for heating and electricity generation in non-commercial premises – this includes the heating of homes and buildings such as places of worship, hospitals and townhalls; off-grid power generation; and non-propulsion uses on permanently-moored houseboats
  • for maintaining community amateur sports clubs as well as golf courses (including activities such as ground maintenance, and the heating and lighting of clubhouses, changing rooms etc.)
  • as fuel for all marine craft refuelling and operating in the UK (including fishing and water freight industries), except for propelling private pleasure craft in Northern Ireland
  • for powering the machinery (including caravans) of travelling fairs and circuses

What does this mean for my business?

This depends on your industry and what you are using red diesel for. If you are covered by the above points, you can continue as normal.

If your business does not fall into the above categories you will need to prepare for significant cost increases. For example, those dealing in construction, manufacturing, transport or logistics will need to switch to regular white diesel, also known as DERV.

Government advice states that there will be no “grace period” to allow businesses to use up remaining diesel past the cut off date of 1 April 2022. Be aware that non-compliance could result in on-site spot checks and fines.

You may also want to consider flushing out your existing tank when switching to white diesel, so no trace of rebated fuel can be found.

Why can construction no longer use red diesel?

This change is part of the UK Government’s strategy to meet climate targets, reduce carbon emissions and improve air quality. By taxing more users at the standard rate, the government hopes to incentivise businesses to invest more in cleaner alternatives like electric vehicles, HVO and to burn less fuel.

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