Red Diesel: New law changes force companies to apply for ‘similar tax cuts’ on fuel


Starting today, April 1, discount diesel – also known as red diesel – and discount biofuels will no longer be used as they are now. It is set to hammer fuel-dependent industries including agriculture, farming and construction, with estimates showing some could be losing thousands of pounds a year.

Andrew Lloyd, chief operating officer at Intelligent Growth Solutions, highlighted the impact the rebate will have on businesses across the UK.

He said: “By continuing to allow the farming industry to use diesel with a discount, the government has recognized that farmers need help with both energy pricing and their green transition.

“More is being asked of UK farmers as we seek to grow more produce closer to home in response to the challenges of long-established supply chains in the wake of COVID-19, Brexit and the ongoing war. in Ukraine.

“While continued access to red diesel and its efficient use as a fuel is part of the solution, we must continue to change the dial if we are to meet the growing climate emergency while continuing to secure food supplies. “

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Mr Lloyd also called for more government help to help businesses adjust to the massive change.

He added: “Higher levels of support are needed for agriculture to realize its ambitions to become greener.

“A key element is to encourage the use of renewable energy, especially in the face of soaring electricity costs.

“We would like to see equivalency with red diesel through a similar tax rebate and commitment to long-term green pricing rates.

“This would encourage wider adoption of sustainable starter and food production methods; allowing the economic justification of technologies such as vertical farming.

Red diesel accounts for around 15% of all diesel used in the UK and is responsible for producing almost 14 million tonnes of carbon dioxide per year.

Red diesel used in the construction and infrastructure construction sectors is also estimated to have caused 7% of nitrogen oxide emissions and 8% of PM10 emissions in London in 2018.

Experts have issued warnings that this could be the first of many changes to come to reduce diesel use.

TV presenter and construction expert Clive Holland previously told “I think they’re going to use this as a barometer. They will think “we used this with builders, then farmers, then hospitals”.

“They won’t be able to have backup generators because they’re driven by red diesel. All of this will incur additional costs, they just want to be seen as doing something. »

The Civil Engineering Contractors Association (CECA) has previously warned that the ban could cost some small businesses up to £600,000 a year.

They said nearly half of businesses had raised concerns about their ability to continue doing business.

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