Red light for red diesel warning

From 1 April 2022, so-called rebated fuels are no longer permitted for most industry sectors, as part of the Government’s efforts to meet climate change and air quality targets.

But, says Jen Cartmell, treatment director for National waste management experts CSG, some industrial process users may find themselves unwittingly breaking the law by continuing to store and use the fuels.

Failure to audit their situation and act in accordance with the law by collecting and disposing of fuel could result in a heavy fine, says Cartmell. 

 “The Government guidance is clear - anyone with surplus stock must ensure it is sold to a registered dealer, given to someone still allowed to use it, or appoint an approved waste oil company to recover and dispose of the fuel,” she explained.

“Users will not only want to comply with the regulations but will also be keen to ensure any surplus red diesel needing to be removed from their premises is collected and disposed of to the highest safety and environmental standards.

The changes will affect most businesses and individuals that currently supply or use rebated diesel and biofuels, including marked oils.

Fuels affected include rebated red diesel, rebated Hydrotreated Vegetable Oil (HVO), rebated biodiesel and bioblend, Kerosene taxed at the rebated diesel rate and fuel substitutes.

Most commonly used in industries with heavy machinery, such fuel was marked with red dye to identify it as subject to a rebate from the full fuel duty rate applied to road-going vehicles.

The new legislation is designed to improve the energy efficiency of vehicles or machinery or compel investment in cleaner alternatives, by making most users pay the full rate of fuel duty.

Cartmell added: “Users of rebated fuel… must plan to use up their current supply and only order as much as they can expect to use by 31 March. 

HM Revenue & Customs can opt to conduct spot checks of storage tanks to ensure no rebated fuel is stockpiled for illicit use after 1 April.