Red Diesel Tax changes are rapidly approaching

The Red Diesel Tax changes come into effect on April 01 2022- is your business ready for the change? In June 2019, the UK passed new laws to end its contribution to global warming by 2050, thus committing to reducing our emissions to net-zero

The Red Diesel Tax changes come into effect on April 01 2022- is your business ready for the change?

Why is this happening and who does it affect?

In June 2019, the UK passed new laws to end its contribution to global warming by 2050, thus committing to reducing our emissions to net-zero. The government identified that Red Diesel is responsible for the production of nearly 14 million tonnes of carbon dioxide a year and as such has legislated to reduce the use of Red Diesel significantly.

The following industries have been earmarked by the government for the fuel duty change on the 01 April 2022:  

  • Construction and road maintenance; Logistics and haulage (including refrigeration units)
  • Mining and quarrying; Oil and gas extraction; Waste management; Commercial heating
  • Leisure; Airport operations and ports;
  • Manufacturing (such as ceramics, timber and steel)

What will this change mean for those industries that are now not allowed to use Red Diesel?

Significant increase in price

Derv intended for use in diesel engine road vehicles, otherwise known as ‘White Diesel’ (because it has no marker or dye), has a fuel duty rate of 57.95 pence per litre (ppl). Red Diesel is entitled to a rebate of 46.81ppl, giving it an effective duty rate of 11.14ppl. This means for industries/sectors that are not on the approved list, the cost to run your vehicles/engines is going to increase significantly on the 01 April 2022 by 48.81ppl.

Annual usage per year | Cost increase per year

5,000 litres                                      £2340.5
10,000 litres                                      £4681
100,000 litres                                  £46,810
500,000 litres                                £234,050

On White Diesel, you also pay standard rate VAT at 20%.

Confirm whether you will be able to use Red Diesel in future Contact HMRC to confirm Reform of Red Diesel entitlements

Talk to local Rix Area Manager to discuss your transition plans Confirm what fuel your will use and plan to run down stocks of your Red Diesel Call you local area manager
Keep records of your diesel transactions. If you sell/buy Red Diesel before the deadline. Don't stockpile ahead of the deadline

The fine details:

Fuels that are impacted:

  1. rebated diesel (often termed gas oil or red diesel)
  2. rebated Hydrotreated Vegetable Oil (HVO)
  3. rebated biodiesel and bioblend
  4. fuel substitutes

The sectors that can continue to use Red Diesel are:

  1. Agriculture, horticulture, fish farming and forestry
  2. Rail transport
  3. Fuel used for power generation and heating in non-commercial public service premises (such as schools, hospitals and prisons)
  4. Community amateur sports clubs and golf courses equipment
  5. Sail boating and marine transport excluding private pleasure craft in Northern Ireland
  6. Travelling fairs and travelling circuses

Storage Considerations

  1. Customer machinery with tanks can still use red diesel post 01 April but only until replenished with White Diesel or equivalent at the next fill period. (There is no requirement to clean the fuel tank of the machine, only to drain the tank and fuel system before being refilled with EN950 White Diesel)
  2. Exemptions exist for critical standby generators 'banks and data centre' there is no requirement to drain or flush before changing to EN590 for these exemptions.
  3. Any surplus Red Diesel for disposal by the end user, they need to record the details of the date, time, volume and location of sale.

Compliance and record-keeping

  1. HMRC may carry out checks on storage and equipment to confirm compliance and the customer will need to provide evidence that any rebated fuel was purchased ahead of 01 April 2022.
  2. Therefore, it is important to keep records of delivery tickets and the time and date of any tank clean or changeover from one grade to another.
  3. The HMRC acknowledge that fully duty-paid fuel may be mixed with existing stocks of rebated fuels during the transitional period until the red dye has been removed.

Do you use Red Diesel for heating?

Then switch to Superheat35

SuperHeat35 has been developed to offer conventional Gas Oil users a high-quality, low-cost alternative fuel to meet their heating needs.

It offers significant savings over Gas Oil whilst providing equivalent calorific value, density and viscosity parameters. It can be used across a wide range of burner applications such as small package boilers, grain dryers, warm air heaters or rotary dryers used in mineral processing.

Call your Account Manager


What are the benefits of switching to Superheat35?

  • High quality, low-cost alternative product to Gas Oil, offering a comparative 8-10% saving
  • Equivalent calorific value to Gas Oil
  • Improves burner output performance
  • Compatible as a drop-in solution with your existing Gas Oil
  • Certified to British Standard BS2869:2010
  • A1:2011 by UKAS accredited laboratories
  • Stored in dedicated tanks at HMRC approved warehouse

Consider going green and switch to HVO

HVO Renewable Diesel is a fossil-free diesel product made of 100% renewable raw materials, which does not release any new carbon dioxide into the atmosphere.

HVO is a drop-in alternative to fossil diesel, meeting EN 15940 standards and Fuel Quality Directive 2009/30/EC Annex II. There is no need to modify existing infrastructure. HVO is a greener renewable fuel with a chemical structure almost identical to regular diesel.

It has been certified as a sustainable fuel by the International Sustainability and Carbon Certification (ISCC) offering net greenhouse gas CO2 reductions of up to 90%. It is also a non-toxic and non-carcinogenic.

HVO Renewable Diesel

What are the benefits of HVO?

  • HVO Diesel is the premium fossil-free alternative to Red Diesel/ gas oil which is made up of 100% renewable raw materials.
  • FOSSIL FREE – a renewable and sustainable fuel
  • Up to 90% lower greenhouse gas emissions
  • Can be mixed with regular diesel
  • Superior cold weather performance, down to -32 degrees
  • Excellent storage features – does not lose quality
  • Odourless
  • Carbon offset delivery mileage
  • High flashpoint - improved safety, storage and handling