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Red Diesel Changes Guide

March 2022
Red Diesel Changes Guide

Red Diesel is to be banned for most uses from 1 April 2022

From this date it is most likely that you will have to use white diesel in your vehicles and equipment. You need to start planning for this now, consider:

Higher cost of white diesel and HVO
Emptying and cleaning tanks before the deadline

The government announced at Budget 2020 that it would remove the entitlement to use red diesel and rebated biodiesel from most sectors. To meet their proposed climate change and air quality targets, this measure is expected to incentivise these rebated fuel users to seek to use greener alternatives or use less fuel if possible.

Red diesel is responsible for the production of nearly 14 million tonnes of carbon dioxide per year. In the construction and infrastructure building sectors, red diesel was estimated to have caused 7% of nitrogen oxide emissions and 8% of PM10 emissions in London in 2018.

Sectors likely to be affected

  • Construction
  • Mining and Quarrying
  • Waste Management
  • Commercial Heating
  • Plant Hire (construction purposes)
  • Logistics
  • Haulage
  • Airport Operations
  • Oil & Gas extraction
  • Ports
  • Leisure
  • Manufacturing

Sectors still eligible for red diesel

  • Agriculture - including horticulture, fish farming and forestry.
  • Community amateur sports clubs and golf clubs - including ground maintenance vehicles such as diggers, cranes and mowing machines.
  • Non-commercial heating and electricity generation - including domestic homes, places of worship, NHS hospitals, town halls and state schools.
  • Rail - including passenger, freight or maintenance vehicles designed to run on railways.
  • Travelling Fairs and Circuses - this includes powering machinery and providing heating/electricity for caravan accommodation.
  • Marine - sailing, boating and marine transport.
View full list

Financial impact

The sectors that will lose the entitlement to use red diesel will need to change over to white diesel or another alternative fuel. Although the government states that it is expected to have a minimal impact on business, fuel costs will increase as you will need to pay the full rate for using white diesel. You will also need to take into consideration any one-off costs which may include - the expense of removing or running down red diesel stocks and purchasing additional tanks, vehicles or equipment.

Alternative Fuel

White Diesel (DERV)

If you are to make the switch to white diesel, be wary of doing so near to the deadline. The dye in red diesel which is designed to stain the interior of tanks and systems could mean that you may be falsely accused of using red diesel.

Hydrotreated Vegetable Oil (HVO)

HVO is produced from vegetable fats and oils, such as cooking oil. It offers improved burn efficiency and reduced carbon emissions. Hydrogen is used as a catalyst instead of methanol, which makes HVO a cleaner-burning fuel with a longer shelf life than standard biodiesel. Unfortunately, HVO will not be given a special tax treatment to encourage its use, even though it has significantly less Greenhouse gas emissions. There is a premium cost above white diesel for this product.

Stay compliant

Regularly Check Government Guidelines
Make sure to read the guidelines for red diesel changes on the government website and check in regularly to stay up to date with any further changes. If you don’t see your intended use of gas oil on the list of approved applications, get confirmation from the government before making any further purchases - It is most likely that you are no longer eligible to use red diesel.

Run Down Stock Levels
It is essential to run down your existing stock levels before the deadline. From April 1st you will not be able to use up any red diesel that is remaining. We advise making a plan for integrating alternative fuel replacements to ensure there is no interruption to your operations. Get a precise measurement of how much fuel is left in storage and then draw up a timeline of usage to predict when you would run out.

Keep Invoices
It is always good practise to keep invoices and records but be prepared as HMRC auditors will require evidence that you haven’t purchased any red diesel after the April 2022 deadline, or stockpiled close to this date.

Illegal use punishment

It is still unsure what approach HMRC will take when it comes to enforcement, however the government are clearly motivated to crack down on the illegal use of red diesel. It is very likely that fines will be issued and potentially vehicles or machinery could be seized, which would mean being charged a fee for the removal.

HMRC is clear that tanks must either be flushed to remove all traces of red diesel. Plant hire companies should complete an inspection when vehicles and equipment are returned.

Preventing theft

Fuel theft is expected to become an increased problem with the higher volumes of white diesel being used and stored on site - both red and white diesel have already been reported as targets for theft. We recommend enhancing your current security measures and surveillance.

If you haven't done so already, consider using a smart tank. These tanks have secure locks to keep your fuel safe and a telemetry system which will monitor fuel levels and notify you if low - a sudden drop in fuel could indicate a theft or a leak.


We're here to help you through this process. If you are still unsure whether the changes apply to your business, contact us anytime for advice.

020 8507 0123

Updated on 30th March 2022