Red Diesel Ban: Why is it happening? How does it affect the Construction Industry?

red diesel ban 2022

Over 15,000 signatures have been made on a petition to delay the removal of red diesel entitlement in construction. This has prompted The Government to issue their response surrounding this issue faced by those in the construction industry.

Despite this uproar, the ban is still set to occur on the 1st of April 2022. So here’s what our team at Assington Autos can tell you about this important topic.

What is red diesel and why is it important?

For those not familiar with red diesel it is the same product as ‘white’ diesel. The difference between the two comes from red diesel being given its colour through the use of red dye. In the simplest of terms, red diesel is what you get through adding a coloured dye to ‘white’ diesel. The red dye distinguishes it as diesel which is meant to be minimally taxed. The fact that it can be minimally taxed is what gives it the name ‘rebated fuel’.

The diesel also has an invisible substance added to it to regulate the legal use of red diesel. This means that even if the red dye is removed it can still be examined to see if the fuel has been used illegally.

Why is the ban important?

Red diesel is a far cheaper alternative to ‘white’ diesel. Additionally, it doesn’t have the same fluctuating price as ‘white’ diesel. Those who were using red diesel before the ban was planned are unhappy with the fact that their businesses will now have to pay significantly higher fuel duty.

White diesel is noticeably more expensive than red diesel

The price difference will be felt after the red diesel ban comes into place in April of 2022. Reportedly the fuel duty for red diesel is 11.14p per litre compared to the white diesel fuel duty of 57.95p. 

The red diesel ban is one of the main culprits for why many believe that the construction industry is on its way to an energy costs crisis. 

Does the red diesel ban apply to all vehicles?

For those working in construction, there will be no way to get around this ban. This is just one case of how focused the Government has been on banning diesel. In January we reported on the diesel and petrol car ban planned for 2025. 

The only vehicles that can get away with using red diesel are off-road vehicles. However, by April 1st this will change. 

After April 1st 2022 only these vehicles will be permitted to use red diesel

The use of rebated fuels will be reserved for use in:

  • Agriculture 
  • Horticulture 
  • Fish farming
  • Forestry 

Then within these sectors, rebated fuel can only be used for:

  • Agricultural vehicles
  • Mowing machines
  • Unlicensed vehicles
  • Certain other machines and appliances

Using red diesel will be purely dependent on what sector you work in. Breaking these laws you could be penalised in the form of fines or having your vehicle taken away from you.

So, why ban red diesel?

The reform is designed to ensure that companies responsible for NOx pollution look at other more environmentally friendly alternatives. By reducing the tax break construction companies have when it comes to fuel, they will hopefully start focusing their practices on fuel efficiency. 

The Government’s current aims through the ban

The aim is to prevent vehicles and machinery to not continuing to waste any fuel. The government particular specified that they hope it will lead people to “use less fuel” during construction work.

Additionally, plans are being made to support the development of alternative energies. The Government is currently looking to double its investment in energy innovation by committing over £1 billion to the Net Zero Innovation Portfolio. Those companies that can prove their business can develop while reducing their carbon emissions will have the ability to receive grants. The grants will be available to those most affected by the red diesel ban such as those in the construction, mining and quarrying sectors. An impressive £40 million will be pumped into this “Red Diesel Replacement Competition”.

Want more news surrounding the current changes occurring in the fuel industry? Check out our up to date news coverage here.