The Impact of the Red Diesel Ban on Fuel Consumption in the Construction Industry
Wed, Jul 5, 2023
Red diesel is a diesel fuel that's taxed at a lower rate than regular diesel for use in “off-road” vehicles and machinery. Whilst the same as diesel, it's dyed red to distinguish its misuse in road vehicles. It's used in construction, agriculture, and forestry industries... or it was until recently.
The government taxed red diesel at a lower rate to subsidise its use in off-road vehicles and plant which emit lower levels of pollutants than road vehicles and have a lesser impact on the environment and roads. However, the fuel type has since been phased out by the government for most industry sectors.
What is red diesel used for?
Red diesel has traditionally been used for any machinery and off-road vehicles, including:
- Construction vehicles, such as diggers, bulldozers, and dump trucks
- Agricultural machinery, including tractors, harvesters, and balers
- Forestry machinery, such as chainsaws, chippers, and skidders
Is red diesel still available?
The entitlement to many industries
to use red diesel has been removed for most businesses industries since April
The UK government announced it was phasing out the use of red diesel as part of
a wider effort to reduce greenhouse gas emissions and improve air quality, rather
than encouraging the use of this fuel with a
The red diesel ban sees a few exempt sectors such as the commercial boating industry, including fishing and inland water freight industries and passenger ferries, non-commercial power generation such as hospitals and off-the-grid households and agriculture, forestry, horticulture, and fish farming. These industries are still able to use red diesel and benefit from the rebated fuel costs, and therefore red diesel is still available to buy in the marketplace for exempt sectors.
Red diesel is not as heavily taxed as regular diesel, which means that it is cheaper to use. This can lead to businesses and individuals being tempted to use red diesel for road vehicles, which can lead to heavy fines, as there are agencies and bodies that check, such as HM Revenue and Customs (HMRC), the Environment Agency, and local authorities.
When is red diesel being phased out?
From April 2022, red diesel was made no longer available to most industries in the UK. As discussed, currently a few industries such as agriculture and fisheries can still use the fuel type for now, as when the government’s proposed change to red diesel eligibility was announced in the 2020 budget, the impacted industries told them their thoughts and views in a consultation period, which led to the government amending the eligibility of some industries. However, this is likely to end too at some point due to the government's commitment to Net zero by 2050 and lowering greenhouse emissions.
Can construction use red diesel?
The construction industry is one of the sectors that is most affected by the ban on red diesel. The industry uses a large amount of red diesel to power its vehicles and machinery, and the ban has led to significant operating cost increases for business as their access to cheaper fuel is removed.
The construction industry has tried to lobby the government to reconsider the ban or to move the rebate to HVO (Hydrotreated Vegetable Oil) instead to help with cost savings and lowering emissions. The industry has argued that the ban will put construction businesses at a competitive disadvantage and will make it more difficult to deliver projects on time and on budget. Construction projects are often tendered and quoted for in advance and will factor in old fuel price levels, so will not take into account rising fuel costs in the future, which will affect profit levels.
What is the alternative to using red diesel in construction?
HVO is the perfect alternative fuel for the construction and plant industry, as it is a greener, renewable fuel that is completely FAME-free, producing 90% fewer emissions when used. HVO fuel can be used in all diesel plant machinery and engines without the need to upgrade or buy new equipment including in diggers, excavators, cranes, and dumpers.
The government also held the Red Diesel Replacement grant competition at the beginning of 2023 to encourage businesses to change over to greener fuel solutions and entries for the grant closed in March 2023.
How can site managers improve their fuel management?
The construction method statement or phase plan is a document that sets out exactly how and when activity will take place on a site and includes the fuel management strategy for a construction project. It is typically prepared by the site or project manager and can include information on the following:
- The types of vehicles and machinery that will be used on the project
- The estimated fuel consumption for the project
The fuel management measures that will be implemented to reduce fuel consumption
The construction method statement is an important document that can help construction businesses ensure health and safety regulations are met on site, reduce their fuel costs, and improve their environmental performance.
You can view an example of a construction method statement on the CHAS website.
Fuel Management System
Using a fuel management system can also help keep on top of costs on site and keep fuel secure. Products like the Piusi 3000 Supreme pump and B. SMART together can help eliminate the risk of wastage and misuse of a company’s fuel. They can be used on a static tank or a bowser across multiple sites, using cloud-based technology and an app.
By only allowing the Piusi pump to be turned on and fuel dispensed by authorised smartphone app holders, it secures the fuel from opportunists when a site is left unattended. The app records all dispensing data such as quantity of fuel taken, as well as the date and time, which helps to spot any anomalies. This data supplied from Supreme pumps on fuel tanks across unlimited sites can be sent to the B. SMART online portal, allowing site managers to see how fuel is being used across all sites wherever they are.
The Piusi 3000 Supreme smart technology and B. SMART fuel management software integration is the perfect secure refuelling solution for job sites of all sizes, whether installed on a static tank or a bowser.