Gas Oil Duty Change

At budget in March 2020, the UK government announced that changes would be made to the way that red diesel is taxed. The legislative changes on the use of red diesel took affect from 1st April 2022 which impacted how red diesel could be used for a variety of sectors and applications. Through limiting the use of red diesel across the majority of commercial sectors the government are encouraging whole industries to switch to cleaner alternative fuels, in a bid to help achieve the UK’s climate change and air quality targets.

We have put together the below guide to help you to understand the implications that the gas oil duty change may have on you and your business.

Click here to visit the government website for more information on whether or not you can continue to use red diesel.

What is red diesel?

Red diesel, also commonly known as gas oil, is diesel used mainly for off-road purposes, such as to power bulldozers and cranes used in the construction, or to power drills for oil extraction. Red diesel accounts for around 15% of all the diesel used in the UK and is responsible for the production of nearly 14 million tonnes of carbon dioxide a year. Currently red diesel is taxed at a lower rate that ‘on road diesel’ and has strict usage regulations as a result.

Who can continue using Red Diesel?

As of 1st April 2022, customers in the following sectors may be required to switch to white diesel (DERV) or other alternative fuels:

• Commercial Boat Industry
• Traveling Fairground & Circus Industries
• Non Commercial Power Generation (Hospitals & Schools)
• Community amateur sports clubs (CASCs) and golf courses
• Forestry, Horticulture & Fish Farming
• Passenger, Freight or Maintenance Vehicles on Rail Tracks
• Non Commercial Heating (Places of Worship & Town Halls)

Who will be affected?

As of 1st April 2022, customers in the following sectors MAY NOT be able to use red diesel (Gas Oil) and may be required to switch to white diesel (DERV) or other alternatives:

• Construction
• Mining & Quarrying
• Ports
• Manufacturing
• Haulage
• Road Maintenance
• Airport Operations
• Oil & Gas Extraction
• Plant Hire
• Logistics & Waste Management

What does this change mean for our customers?

The exact implications for your business will depend on your industry and which application you’re using red diesel for.

If your application is INCLUDED in the list of qualifying uses for red diesel, you will not be affected by the gas oil duty change. You can continue to order, receive and use red diesel.

If your sector is NOT INCLUDED in the list of qualifying uses – including our construction and manufacturing customers, as well as a number of transport and logistics uses – you may not be able purchase or use red diesel and you may need to switch to an alternative future fuel.

Alternative Fuels

Even though the legislative change has brought challenges to businesses who are no longer able to use red diesel as of April 1st 2022. We must see this as an opportunity to consider the use of future fuels as a way of creating a pathway to a better environment for all communities. Our future fuels are cleaner and greener and made from fossil free, certified sustainable waste materials, reducing your carbon emissions, in some cases by almost 90% compared to existing fuels.

If you have been affected, what are your options?

Aside from standard white diesel/DERV we now supply a range of future fuels that are now available from a number of our depots…

HVO

As a renewable drop in alternative, HVO fuel (Hydrotreated Vegetable Oil) offers up to 90% reduction in greenhouse gas emissions helping you reduce both your localised emissions and your overall carbon footprint.

HVO is now available from our northern depot locations (Teesside, Birtley, York and Lincoln).

Shell GTL Fuel

Shell GTL (gas-to-liquids) Fuel is an alternative fuel, made from natural gas, that provides a cleaner burn in comparison to conventional crude oil-based diesel. 

Shell GTL Fuel functions in a diesel engine in the same way as conventional diesel since its chemical composition is very similar, making it an excellent direct-drop-in replacement to red diesel.

Fuel Cards

With the recent increase of DERV/white diesel prices it has become more of a challenge to hold and store fuel on sites due to the increased risk of theft.

Simply and safely manage your business fuel requirements through our extensive range of Fuel Cards.

Click here to visit the government website for more information on whether or not you can continue to use red diesel.

To make an enquiry about Your NRG’s future fuels offering simply submit your contact details on our contact page.