New amendments to red diesel rule changes, explained: what business fuel users need to know

Earlier this year, in our Guide to the Red Diesel Rule Changes, Certas Energy shared news of the UK government’s planned changes to when and how red diesel/gas oil will be permitted for use from 1 April 2022. After this date, many businesses will need move to unrebated DERV/white diesel or a cleaner-burning alternative fuel or energy source.

So far, official guidance on the subject has remained relatively top-level, which has left a lot of fuel users wondering whether or not the changes apply to them. Now, HMRC has released new interim guidance that clarifies several key points of confusion. A final version of the guidance is expected to be published on gov.uk following the Budget announcement on 27 October 2021.

Why is HMRC releasing new interim guidance on red diesel rule changes?

For the most part, red diesel rule changes will proceed as they were broadly set out in the government’s preliminary guidance, published earlier this year. For an overview of what the changes are and who they will apply to, read our earlier overview. However, since this initial advice was published, the government has refined its approach. Amendments being introduced are designed to make the rules clearer and help businesses transition from red fuel to white or cleaner alternatives.

What are the main amendments to the original red diesel rule changes?

  • If red diesel is still sitting in tank of a vehicle or machine that is no longer permitted after 1 April 2022, it can now be used up until the tank is empty—as long as it is not refilled with red diesel again.
  • If red diesel is still held in an external storage tank after 31 March 2022, but the holder is not permitted to use the fuel after this date, it must either be sold or given to someone who is allowed to use it, or to any Registered Dealer in Controlled Oil (RDCO). Otherwise, it must be disposed of via an approved waste oil recycling or disposal company. To remain compliant, users will need to keep a record of how and when the fuel was disposed of, or who it was sold to and when.
  • For powering machinery and back-up electricity generation in an emergency or a safety-critical environment, or if used for environmental protection, red diesel that was purchased before 10 June 2021 can now be used after 1 April 2022.
  • Red diesel that has been lawfully dispensed into a vehicle, vessel or machine outside the UK may be used for the same purpose within the UK, even when purchased after 1 April 2022.
  • Private pleasure craft that refuel with red diesel in Great Britain may not use that fuel in Northern Ireland once the April deadline has passed.
  • The definition of agricultural vehicles that can use red diesel has become more specific: the guidance permits both tractors and vehicles that are designed and/or licensed only for off-road use related to agriculture, forestry or horticulture.
  • Special vehicles that can run on red diesel in certain commercial applications are now also defined more precisely as digging machines, mobile cranes, mobile pumping vehicles, work trucks and road rollers only. As the government previously announced, red diesel can only be used in specific commercial settings, for example in an agricultural setting–the full list of permitted uses for red diesel in special vehicles is available on gov.uk. When used for the majority of other commercial purposes, for example in a construction setting, the use of red diesel will not be permitted.
  • The definition of a travelling fair and circus that can run on red diesel has also been amended to specify that it must be dismantled at least once a year and can travel from place to place.

To read the interim guidance document in full, click here . Once the final government guidelines have been published after the next Budget announcement, Certas Energy experts will provide a further summary with an essential rundown of all elements confirmed by then, relating to the red diesel rule changes.

Let’s get ready for the red diesel rule changes, together

Not sure whether the red diesel rule changes apply to your business, or wondering how to stay compliant while balancing the bottom line? Certas Energy is here to help.

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