Red diesel
![]() |
This fuel pump dispenses red diesel to patrons who use the fuel for boats, agricultural vehicles or other authorised users. It is not intended for use in standard road-going vehicles. |
Contents |
[edit] Introduction
Red diesel is a type of gas oil (or diesel) that is chemically marked and dyed to prevent it from being used by road-going vehicles. It is most commonly used as a fuel for off-road vehicles and machinery used in construction, agriculture, forestry and fishing. It can also be used for power generation and heating applications.
[edit] Reasons for red diesel
Red diesel is a rebated fuel which is less expensive than white diesel. White diesel (which has no marker or dye) is intended for use in diesel engine road vehicles. It has a fuel duty rate of 57.95 pence per litre (ppl) (2021 level) whereas red diesel is entitled to a rebate of 46.81ppl (2021), giving it an effective duty rate of 11.14ppl.
[edit] Modifications introduced in Budget 2020
In the 2020 Budget, the Government announced that it was removing entitlement to use red diesel from most sectors, other than agriculture, horticulture, forestry, fish farming, rail and non-commercial heating. This change is scheduled to go into effect 1 April 2022.
Businesses losing their entitlement to use red diesel and will need to switch to white diesel. This will include construction, mining and quarrying, ports, manufacturing (e.g. ceramics, steel, timber), haulage (for transport refrigeration units on lorries), road maintenance, airport operations, oil and gas extraction, plant hire, logistics and waste management.
These businesses will need to pay the full duty rate for using white diesel and will therefore experience increased costs. It is hoped that this will encourage fuel users to seek greener alternatives or to use less fuel.
[edit] Anticipated disruptions
One-off costs will include familiarisation with the changes for those sectors no longer entitled, including costs in running down or removing red diesel and rebated biofuels from vehicles, machinery and storage tanks, and possibly from selling back any excess red diesel stock to fuel suppliers. There are also likely to be costs associated with sourcing alternative fuels for those sectors no longer allowed to use rebated fuels.
The Government will aim to reduce some of these familiarisation costs by carrying out further pre-implementation publicity to make businesses aware of the changes, including providing guidance to support businesses to ensure they comply with the new rules. It will also allow some latitude to businesses during the transition, including allowing businesses to use up red diesel taken in before the change, as long as officials can be satisfied that the user has not taken red diesel into the fuel system after the change in rules for usage.
In March 2022 the National Federation of Builders and the Road Haulage Association called for a delay in the removal of the red diesel rebate due to rapidly rising fuel costs. Price rises have resulted from a combination of Covid-19, the subsequent energy crisis and the war in Ukraine. Richard Beresford, chief executive of the NFB, said: “These are unprecedented times and after rejecting industry pleas on minimal exemptions for plant vehicles that could not be electrified, such as mobile cranes, this policy change arrives in the middle of a perfect storm on British energy costs and so a twelve-month deferral on removing the red diesel rebate is pragmatic.”
[edit] Related articles on Designing Buildings
Featured articles and news
Spring Statement 2025 with reactions from industry
Confirming previously announced funding, and welfare changes amid adjusted growth forecast.
Scottish Government responds to Grenfell report
As fund for unsafe cladding assessments is launched.
CLC and BSR process map for HRB approvals
One of the initial outputs of their weekly BSR meetings.
Architects Academy at an insulation manufacturing facility
Programme of technical engagement for aspiring designers.
Building Safety Levy technical consultation response
Details of the planned levy now due in 2026.
Great British Energy install solar on school and NHS sites
200 schools and 200 NHS sites to get solar systems, as first project of the newly formed government initiative.
600 million for 60,000 more skilled construction workers
Announced by Treasury ahead of the Spring Statement.
The restoration of the novelist’s birthplace in Eastwood.
Life Critical Fire Safety External Wall System LCFS EWS
Breaking down what is meant by this now often used term.
PAC report on the Remediation of Dangerous Cladding
Recommendations on workforce, transparency, support, insurance, funding, fraud and mismanagement.
New towns, expanded settlements and housing delivery
Modular inquiry asks if new towns and expanded settlements are an effective means of delivering housing.
Building Engineering Business Survey Q1 2025
Survey shows growth remains flat as skill shortages and volatile pricing persist.
Construction contract awards remain buoyant
Infrastructure up but residential struggles.
Warm Homes Plan and existing energy bill support policies
Breaking down what existing policies are and what they do.
A dynamic brand built for impact stitched into BSRIA’s building fabric.