What does the diesel duty change mean for my business?

At the Budget 2020, the UK Government announced that it was removing the entitlement to use red diesel from most sectors. The exceptions were agriculture, horticulture, forestry, fish farming, rail and non-commercial heating.

If your business currently uses red diesel and doesn’t fall into one of those sectors, what does this change mean for you?

Construction is likely to be one of the hardest hit sectors from this change. Road vehicles have been unable to use red diesel for a number of years as legislated in the Hydrocarbon Oil Duties Act 1979. However, non-road vehicles and equipment use high quantities of red diesel or gasoil currently.

As a result of this change to legislation, if you operate out-with the sectors specified for use of red diesel, you will have to switch to white diesel from April 2022. The alternative is switching to a renewable liquid fuel such as HVO or to a biodiesel.

There is a cost implication associated to this move to white diesel which has a higher Government duty rate applied to it. The current duty for diesel when used in a road vehicle is 57.95 pence per litre. Compared with the rebated duty level on red diesel, this will see an approximate 47ppl increase to your fuel purchasing from the 1st of April 2022.

If you have any questions around the changes to legislation, our commercial team are at the end of the phone to help.