Many sectors will no longer be entitled to use “red” diesel and rebated biodiesel from 1 April 2022.
The change is due to new government rules to help meet climate change and air quality targets. The tax changes will ensure that most users of red diesel use fuel taxed at the standard rate for diesel from April 2022, like motorists, which more fairly reflects the harmful impact of the emissions they produce.
The government has published guidelines that clarify who can still use red diesel and in which applications.
One of the biggest changes is for the construction industry, which can currently use red diesel for heavy plant and equipment.
Other affected industries include:
- mining and quarrying
- airport operations
- oil and gas extraction
- waste management
- commercial heating
Red diesel is ordinary diesel with a dye in it. It is taxed at a much lower rate and was introduced as a concession for certain industries in off-highway settings.