Spotlight on...
RED DIESEL
Tracey Dagley
Alison Smedley, IWA campaigns & public affairs manager, takes a look at the recent Government announcement about the use of red diesel on boats, and unpacks the Association’s campaigning activities on the subject since 2008 The announcement in the Chancellor’s Budget of 3rd March that Government will retain the use of red diesel for both private and commercial boats is fantastic news for the inland waterways. IWA has lobbied Government about this issue for over ten years and the decision will have been widely welcomed by boat-owners, freight operators, boatyards and boat-based fuel suppliers. The announcement coincided with the publication of the conclusion of last year’s Treasury consultation. This confirmed that the current arrangement for private boat-owners will continue, where they are able to use red diesel and pay their fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion they intend to use for propulsion. It was also confirmed that all commercial boat-operating industries will be able to continue to use red diesel, which is great news for increasing inland waterways freight and getting more traffic off the roads.
U-TURN The decision overturns the announcement from HMRC last July, which stated that privately owned pleasure-craft would not be able to use red diesel from April 2022. A consultation launched at the same time asked for any exceptional reasons why certain sectors should be allowed to continue using it. IWA’s response to that consultation put a compelling case for inland waterways freight and pleasure-craft to continue to use red diesel until such a time as there was widespread distribution and use of biofuels. Among IWA’s concerns was the impact such a change would have on boatyards, most of which currently only sell red diesel. Faced with the cost of having to install an additional tank to supply white diesel as well as red, it is likely that most boatyards and marinas would have continued to sell only red diesel, particularly those that operate hire-boat fleets or have residential moorings. Consequently, owners of privately owned pleasure-craft needing to refuel their boats with white diesel would have struggled to find a boatyard that sold it. Other
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concerns were around safety and environmental risks due to the likely use of portable fuel cans and generators. Boat-owners will welcome this change of plan, along with boatyards and boat-based fuel suppliers who now won’t need to invest in new equipment. IWA is slightly disappointed that Government hasn’t gone further by addressing the tax anomalies that make alternative fuels, such as HVO, more expensive to buy. It does, however, pave the way for IWA to campaign for parity over sustainable fuel taxation in the future without all the unnecessary expense of moving over to white diesel in the meantime.
Background to IWA's campaign about the taxation and use of red diesel Here is a round-up of some of the key moments during IWA’s successful campaign, which extended more than a decade: ■ Pre 2008 – Boat-owners were able to purchase and use lowertaxed diesel marked with a red dye, otherwise used by the agricultural and construction industries, for pleasure-boating. ■ 2008 – A UK derogation from the Energy Products Directive (which permitted the UK to continue to levy a reduced rate of duty on motor fuel to be used for propulsion in private pleasurecraft) ended. At that time, IWA, RYA and British Marine worked closely with HM Revenue & Customs to achieve a sensible arrangement of self-declaration, whereby boaters were able to decide at the point of purchase what proportion of their diesel consumption would be used solely for propulsion, and what proportion would be used for heating and lighting. ■ 2011 – The European Commission first threatened to open infringement proceedings against the UK Government for not adhering to EU directives on fiscal marking, designed to prevent the improper use of certain petroleum products. HM Treasury agreed with IWA’s view that the agreement reached in 2008 complied with Directives and responded to the Commission accordingly. Summer 2021 20/04/2021 11:34
