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The Red Diesel Deadline & Rising Price of Fuel Impact – April 2022

With only days till the reform of rebated diesel, as well as increasing tensions mounting throughout the world with daily fuel increases, what is going to be the effect?

The call for the rebate of red diesel throughout the construction industry was announced back in 2020 by the British Government during the budget. This is an effort to reach the UK’s carbon-neutral target in 2050. So, what does this mean for the hire industry?

As rebated diesel will no longer be available in the construction sector, businesses are having to result choosing alternative fuels to run their machinery. From the 1st April 2022, the following machinery will be affected:

(https://www.gov.uk/government/publications/reform-of-red-diesel-entitlements/reform-of-red-diesel-and-other-rebated-fuels-entitlement)

“Removing entitlement to use rebated diesel from most sectors, except for agriculture (as well as horticulture, forestry and fish farming), rail and non-commercial heating, from 1 April 2022.

At Spring Budget 2021, the government announced the final policy design of the changes, as set out in the summary of responses to the consultation. This included restricting the use of rebated diesel and biofuels from 1 April 2022 to the following qualifying purposes:

  • for vehicles and machinery used in agriculture, horticulture, fish farming and forestry. This includes allowing vehicles used for agriculture to be used for cutting verges and hedges, snow clearance and gritting roads
  • to propel passenger, freight or maintenance vehicles designed to run on rail tracks
  • for heating and electricity generation in premises used for non-commercial purposes. This includes: the heating of homes and buildings such as places of worship, hospitals and townhalls; and electricity generation for homes and other premises being used for non-commercial purposes
  • for maintaining golf courses and community amateur sports clubs (including activities such as ground maintenance, and the heating and lighting of clubhouses, changing rooms etc)
  • as fuel for all marine craft refuelling and operating in the UK (including fishing and water freight industries), except for propelling private pleasure craft in Northern Ireland
  • for powering the machinery of travelling fairs and travelling circuses (including providing heat and electricity for caravans used by them)

The changes will also extend fuel duty to biodiesel, bioblends and fuel substitutes used for heating, applying the rebated duty rate to non-commercial heating and the full rate of duty to commercial heating.”

How does this affect the hire industry?

From the 1st April 2022 plant and tool equipment hire will have to use alternative fuels for a vast amount of commercial applications. This will affect machinery such as excavators, dumpers, telehandlers, rollers etc.. In consequence, increasing overall operational running costs throughout the construction sector. An example of running costs can be found here: https://whchire.com/news/the-transition-from-red-diesel-what-you-need-to-know-in-the-construction-sector/

What are the alternatives to rebated diesel?

There are a few alternatives to rebated diesel that businesses can take advantage of such as white diesel and HVO.

White diesel- typically the term used to refer to ‘taxed’ diesel, and is the standard diesel fuel that you can find in cars, vans and trucks across the UK. It can be considered in contrast to dyed or coloured diesels which are untaxed/low taxed.

HVO- A paraffined, second generation, renewable diesel which offers up to 90% net less carbon emissions. This type of diesel is considered to be the answer to reducing and meeting the government’s goals of net-zero by 2050. It can also be mixed with white diesel and run through most standard engines that are not equipped with stage V emissions.

Rising fuel prices in March/April 2022

There is a massive question that will be affecting not only the plant and tool hire industry, but also the way that all of us go about our day-to-day activities… and that’s fuel costs. In the current economic climate, there is a lot of uncertainty of the cost of fuel on a day-to-day basis. We are sure you have all seen this happing at the fuel pump. So, what can we do about it and how can you maximise your efficiency to keep your operating cost down?

Firstly, is to use the latest stage V emissions equipment available on the market. This will reduce your overall use of diesel or HVO throughout your project. Manufacturers have been working endlessly to design new technologies to enhance the way machinery is operated. Higher efficiency equals more productivity per litre. In turn, reducing fuel costs overall. Choosing old machinery unequipped with the latest technology could end up costing you far more in the long run.

Secondly, is to assess your method of transporting your machinery. There is no doubt that not all companies have the capabilities to transport large machinery around the country. Transport planning of large plant machinery is extremely important. As fuel prices continue to rise, undoubtedly so will the cost of transport. It is important that if you require a piece of machinery to be moved or delivered, that it is done in the most efficient way possible. Always work closely with your hire professionals so that you can maximise and budget effectively.

What is WHC Hire Services doing to help?

WHC Hire has been a leading independent UK plant and tool hire company for over 20 years, operating in Worcestershire, Gloucestershire and the Cotswolds. Our commitment to our customers is to provide the highest quality equipment, when and where they need it. This has resulted in annual reinvestments into updating our equipment so we can ensure that businesses, companies and DIYers can complete their projects as efficiently as possible. With even more stage V equipment landing only a month ago, we provide the reliability and confidence required to get the job done. During these unsettling and unpredictable times, WHC Hire is also offering customers the highest competitive rates when it comes to transport. With daily monitoring of the price of white and HVO fuel, you can be certain you will get the most up to date cost on transport and refilling of machinery. Please always speak to one of our hire team professionals who will be able to update you on the cost of transport. Call 01684377977

As of the 1st April 2022 WHC Hire will be operating white diesel within our fleet to ensure we remain compliant with the new government guidelines. (More information and terms to be announced this month). We look forward to helping all our new and existing customers through this new financial year, making sure you can maximise your productivity in the most cost-effective manner.