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Blog: Red Diesel Regulation Changes April 2022

Red Diesel Regulation Changes
24 Mar 2022

A Guide to Red Diesel Regulation Changes 2022

The rules surrounding the use of red diesel are changing. This could mean a change in the requirements for using this type of energy for many industries.

The eligibility of different businesses and industries are also changing. You need to be clued up to ensure you don’t get caught out.

What is red diesel?

Red oil diesel is regular diesel but dyed to make it traceable by law as rebated fuel. This ensures that you don’t use the wrong sort of diesel, and it prevents fuel fraud and theft.

Red dyed diesel is often taxed at a lower rate and legal regulations protect how it’s used in a commercial area.

Why are red diesel regulations changing?

The changes in rebated diesel regulation are part of the larger movement towards more environmental and efficient energy use in commercial industries and manufacturing in the United Kingdom.

The changes will affect both dyed diesel and rebated biodiesel across the sectors.

The industry that is predicted to be most affected is construction. Other affected areas include leisure, mining, waste management, and commercial heating. Below, we’ve answered some key questions for professionals to make the transition stress-free.

What will happen to red coloured diesel from 1st April 2022?

From the 1st April, the Government has announced that suppliers can only offer rebated diesel fuel for the following:

  • Vehicles and machinery used in agriculture, horticulture, fish farming, and forestry. This includes allowing agricultural vehicles 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
  • Heating and electricity generation in non-commercial premises. This includes homes, places of worship, hospitals, and town halls. It also includes off-grid power generation, and non-propulsion use on stationary houseboats.
  • Maintaining community amateur sports clubs and golf courses. This includes as ground maintenance, heating, and lighting.
  • Fuel for all marine craft refuelling and operating in the UK. This includes fishing and water freight industries. It doesn’t include propelling private crafts for recreation in Northern Ireland.
  • Powering the machinery (including caravans) of travelling fairs and circuses.

Where do the new red diesel rules apply?

The measures also cover fuel duty on biodiesel, bio blends, and fuel substitutes used in heating. The rebated duty rate applies to fuels used for non-commercial heating, and the full fuel rate of duty applies to fuels used for commercial heating.

It is important to know that rebated gas oil permissions apply to the way you use equipment, not the equipment type.

How to get ready for the red diesel changes on 1st April 2022:

1. Familiarise-yourself and your business with the new Government Guidelines and red diesel rules. We have given the essentials, but more advice visit the government website.

There is no grace-period or transition period for the switch from dyed diesel to alternative fuel. From the 1st April there is the possibility of spot-checks and on-site fines for industries that have not made the switch.

2. Check and run-down your red diesel stocks. You will need to run down your existing reserves before the 1st April deadline. This doesn’t mean you need to remove every trace of from your tanks. But, you may have to prove you haven’t purchased any after April 2022 or a stock close to this date.

3. Keep records and invoices­. It is good practice in any business to keep a record of income and purchases made within the company. By the April 2022 deadline have all this documentation available for inspectors with a clear audit trail.

What are the alternatives to rebated fuel from 1st April 2022?

The change in legal regulations for red diesel are part of a broader shift in the UK towards a cleaner fuel future. This has meant many firms are looking for alternatives and some are already on the market.

Kerosene: This is an already established low-viscosity oil usually used as fuel for heating. It has a lower freezing point but higher flash point than diesel. After the start-up costs, kerosene is a cheaper alternative to diesel.

Kerosene is one of many fuels known as ‘Industrial Heating Oil or IHO which are cost-effective alternatives to rebated oil fuel (diesel). They are used for heating, and not agricultural equipment.

Being Prepared for the April 2022 Switch

Familiarise yourself and your industry partners with the upcoming laws.

The Government has warned there’s no grace period for the switch. On-site fines are a possibility for firms and businesses that don’t comply.

If you’re switching to white diesel, you’ll need to flush out existing tanks and supply lines. Removing all traces of rebated fuel ensures compliance, and it prevents contamination. You don’t want white diesel that has had the full duty rate paid on it to contain any red diesel marker.

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