red diesel
LOSS OF RED DIESEL REBATE COULD COST NI CONSTRUCTION INDUSTRY £25 MILLION Four of Northern Ireland’s leading Trade Bodies for the construction, mineral products and manufacturing sectors are warning that material, manufacturing and construction costs are set to increase from this April. From 1st April 2022, many sectors will lose their entitlement to use ‘red’ diesel and rebated biodiesel across a variety of applications, including manufacturing, construction and mineral products being the industries most affected. The estimated cost of this in Northern Ireland is estimated at £20 to £25 million and according to the Civil Engineering
Contractors Association (CECA), losing the red diesel rebate could cost the UK construction industry between £280m to £490m a year. Red diesel is just ordinary ‘white’ diesel with a dye in it, but it is taxed at a much lower rate than white diesel. One of the biggest changes for construction and minerals industry users is that heavy plant and equipment of all kinds will no longer be able to run on red diesel when used for construction and mining purposes. This includes all non-road mobile machinery (NRMM), including excavators, dumpers, shovels and cranes. The construction and mining industry will also
lose permission to use red diesel for commercial heating and power generation, for example when using mobile generators on construction sites. Gordon Best, Regional Director MPANI, commented: “Our industry takes its environmental responsibilities seriously, as can be seen by the areas of priority habitat created through quarry restoration over the last decade, and the 53 per cent reduction in carbon dioxide emitted by the concrete and cement industry since 1990. We already pay significant levels of environmental tax through aggregates levy and climate change levy.
“As an industry, we are totally committed to Net Zero and the energy transition to lower/zero carbon fuels such as compressed natural gas, electric batteries and hydrogen fuel cells. Our Industry has always been at the forefront of new technology but the new zero carbon solutions that will be used to power the heavy equipment we depend on is still some years away. We certainly do not believe the rebate should last forever. We believe that Government should have delayed the removal of the rebate or at least phased out its use over the next five years.” Mark Spence, Managing Director of the CEF, commented: “At a
GUARDING AGAINST INCREASED RISK OF FUEL THEFTS SWITCHING FROM RED TO WHITE DIESEL
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A possible consequence of red diesel being no longer available at a rebated rate means users will have to switch to white which is considerably more expensive, thereby increasing the risk of fuel theft which already accounts for heavy losses from commercial sectors, with a reported 120,000 fuel theft incidents in 2018.
“It is an accepted fact that criminals are quick to react to new opportunities. It is highly likely that white diesel theft will become the new “criminal growth industry” and will lead to a significant increase in diesel theft across the UK,” says the MPA.
In a recent briefing note to members, the Mineral Products Association spoke of this as being a major concern and one that can literally bring the continuity of a site to a grinding halt if left unchecked
- The value of white diesel, approximately double the value of red diesel;
The government changes also come at a time when fuel prices are at an all-time high, with diesel costs around £1.50 per litre compared to £0.73p per litre for red diesel. White diesel attracts 57.95p per litre duty compared to only 11.14p per litre duty on red diesel.
- The greatly increased market for white diesel compared to red diesel, i.e., road going vehicles as well as other industry uses.
PLANT & CIVIL ENGINEER
The significant factors at play here are: - The overall increase in fuel costs to record highs;
- Sites storing large quantities of white diesel in tanks, mobile bowsers, mobile plant and trucks;
The risks and consequences of theft may not be limited to the financial loss of any asset, says the MPA. The act of
theft may result in physical damage to be repaired, while spillages can result in environmental damage that site operators are required to clear up.
OPPORTUNIST THEFT These are the most regular form of criminal attacks. Suspects will often use site tools that have not been locked away to access fuel tanks and workshops. Empty oil drums can be used to transport fuel off site using site wheelbarrows. These suspects will frequently target power tools, fuel from site tanks as well as fuel from extraction pumps. Thefts rarely exceed 200 litres and are normally conducted outside of operational hours.
ORGANISED THEFT These thefts are less common but are likely to increase, warns the MPA. Suspects use Transit type vans and closed lorries to carry up to five 1000 litre bulk liquid
