Changes to red diesel use: caught red handed?

Red diesel is simply diesel which is dyed to indicate it is rebated and hence subject to less fuel duty and VAT than normal (white) diesel. Currently, most non-road machinery is capable of being powered by red diesel, which is significantly cheaper than white diesel, but as a result of the government’s climate change policy the exemptions are reformed such that they will only apply to very specific uses such as for agriculture or for non-commercial heating. This means that any business outside of these specific sectors using red diesel will need to deplete stocks and prepare for an increased fuel bill from 1 April 2022. Those no longer able to use red diesel after 1 April 2022 are (but not limited to):

  • Construction and road maintenance
  • Manufacturing
  • Logistics and haulage (including refrigeration units)
  • Waste management
  • Commercial heating
  • Leisure
  • Airport operations and ports

A minor point, but red diesel in vehicles added before 1 April 2022 will be capable of being used up after that date provided it qualified before 1 April 2022. Any in storage at 1 April 2022 should be disposed of or transferred. Tanks do not need to be flushed out after 1 April 2022.

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