Ministers meet industry over red diesel tax rates

Representatives from the aviation, shipping, haulage and construction industries met with Environment Minister Thérèse Coffey and Treasury Minister Robert Jenrick as part of the government’s call for evidence on red diesel.

Launched in May, the call for evidence is seeking views on whether red diesel for non-road mobile machinery discourages the purchase of cleaner alternatives (see airqualitynews.com story).

Red diesel is used in a variety of applications, including non road mobile machinery

It forms part of the government’s Clean Air Strategy which is currently out for consultation, and outlines some measures that will be implemented to tackle air pollution from a range of non-transport sources.

‘Red diesel’ is the term used for gas oil that is intended for use other than as fuel in road vehicles – largely in agricultural machinery, but also in appliances such as secondary engines for refrigeration lorries, off-grid heating and construction equipment. It is coloured with a red dye to ensure it is not illegally used in road vehicles.

Red diesel currently benefits from a tax rebate of 46.81ppl giving an effective rate of 11.14ppl – costing around £2.4 billion per year in revenue, compared to diesel charged at the main rate, according to the government.

Air Quality

Commenting following yesterday’s meeting, Environment Minister Thérèse Coffey, said: “This week Robert Jenrick and I met industry representatives to hear what they are doing to improve air quality.

“With red diesel accounting for 15% of all diesel consumption in the UK, industry has a key role to play in reducing the harmful emissions. We must all play our part in looking after the environment and cleaning up our air.”

According to Defra, although red diesel is often thought mainly used in the agricultural sector, 75% of it is used across a range of other industries, including rail, shipping and in construction, mining and airport support vehicles.

The Call for Evidence closes on 24 July 2018. Red diesel used for agricultural purposes and for fishing vessels is not in the scope of the call for evidence.