The government’s proposed red diesel “ban” is actually a BIG tax rise – and will be enforced from April 2022, restricting the use of red diesel in most sectors.

Back in 2019, the UK government set out its plans to cease its contributions to climate change by becoming carbon neutral by 2050. These plans were, at the time, some of the most ambitious timelines set by any nation around the world.

In the months since, the government has set into motion a number of policies designed to pave the way to a carbon-neutral future.

For industries that rely on red diesel and white diesel, the changes to long-standing tax and duty rates have been designed to incentivise users to develop and adopt cleaner alternative fuels.

What is red diesel?

Red diesel, also commonly called gas oil or cherry red, is regular diesel that’s exclusively used in off-road machinery and engines and is primarily used in the agricultural, marine and construction sectors.

Red diesel is different from white or “road” diesel in two ways: its colour, and the rate at which it’s taxed. Chemically, the two fuels are identical, and release identical levels of greenhouse gasses when burned.

Its colour is changed through the use of a red dye that’s used to differentiate it from unrebated fuel.  The dye doesn’t change the properties of the fuel in any noticeable way, but does coat the inner workings of machinery which allows law enforcement agencies to track the illegal use of the fuel.

The largest and arguably most impactful difference between the two is their tax rate. At time of writing, red diesel users pay 11.14 pence per litre (ppl) in fuel duty, which is considerably less than the 57.95ppl paid by white diesel users. This discounted tax rate effectively provides an 81% discount.

From an environmental standpoint, this creates a range of issues, not least that red diesel users are paying less than single car owners for the harmful emissions they produce. After all, 1 litre of diesel releases the same emissions regardless of whether it is used on a road or off it.

In order to encourage users to switch away from this carbon-heavy fuel, the government intends to end its 10-year freeze on red diesel fuel duty.


Red diesel in the 2020 budget

The government announced a number of changes to its approach to diesel taxation in Budget 2020. The changes with the widest impact are the new restrictions on red diesel use, which have been applied by sector rather than on a case-by-case basis and will take effect from April 2022.

Affected businesses will no longer be eligible for the red diesel tax rate, meaning they have to use fuel that is taxed at the standard rate for white diesel. The intention behind this change is to offset the damaging environmental impact of the fossil fuel, and to encourage users to switch to more environmentally friendly alternative fuels.

What sectors remain eligible for red diesel?

The change to the list of eligible users from April 2022 is severe and those that will remain permitted are:

  • Agriculture, forestry, horticulture, fish farming
  • Rail, including passenger and freight
  • Powering non-commercial heating systems (e.g. homes, narrowboats and religious buildings)

The government has acknowledged the significance of red diesel to the agricultural, forestry, horticulture and fishing industries. As these industries are so intrinsically linked, they are likely to be treated as a united group when it comes to the red diesel legislation.

This isn’t to say that this eligibility won’t change in the future, however; the government has already stated that the use of red diesel in all of these settings will come under review as alternative fuels and power sources become available.

Why is red diesel use banned for some industries and not others?

The decision to ban certain industries from using red diesel isn’t an arbitrary one; it’s a move that’s backed up by some startling statistics.

  • Red diesel is responsible for 14 million tonnes of CO2 released every year
  • The construction and infrastructure sectors alone were responsible for 7% of NOx emissions and 8% of PM10 emissions in London in 2018.

Red diesel’s impact on the environment will be reduced as its widespread use is restricted, whilst the additional duty paid by sectors who move to white diesel will be reinvested into green initiatives.

Enforcing changes with red diesel users

Those sectors that will lose their access to red diesel will be free to switch to white diesel, but it’s not as simple as using red diesel on the 31st of March 2022 and topping up with white diesel on the 1st of April 2022.

Red diesel contains a dye that is designed to stain the interior of engines, tanks and pipework that uses it. This allows law enforcement agencies to track and trace illegal use of the fuel, but also means that users switching after April 2022 could be at risk of being falsely accused of misusing red diesel.

Whilst the government hasn’t provided any official guidance to users, they have asked that they don’t flush out their systems. This is to prevent accidental environmental damage through the unsafe disposal of red diesel.

What are the penalties for using red diesel after April 2022?

Under the law as it stands, the illegal use of red diesel is a criminal offence. Perpetrators can be prosecuted, and face heavy fines or even jail time if found guilty.

Where do we go from here?

The writing is on the wall for fossil fuels in the UK; whilst it will be difficult to eliminate their use entirely (if not impossible), the government will use all the tools at its disposal to reach their zero carbon goals.

We fully support and applaud the government’s ambitious deadline for becoming a carbon neutral economy by 2050. Climate change is a real and present threat to the world as a whole, and here at 4K Systems we’ve already taken steps to reduce our own carbons such as electric vehicles, low energy heating and lighting systems. 4K are very active in assisting companies switch to battery electric forklifts and have a proven track record helping dozens of companies do so. There are very few instances where a diesal or gas powered forklift cannot be replaced with a battery electric version.