Changes to Red Diesel Regulations – Get Ready for April 2022


At Budget 2020, the government announced that from the 1st April 2022, it will remove the entitlement for most sectors to use red diesel, with the exception of agriculture, horticulture, fish farming, forestry, rail and non-commercial heating system users. This means that any business operating outside of these sectors must use fuel that is taxed at the standard rate for white diesel.

What is red diesel?

“Red diesel” is the term used for gas oil that is intended for use other than as fuel in road vehicles.

Red diesel is so called because it has been a requirement since 1961 for it to be marked with a red dye as well as chemical markers (other than in circumstances where a technical marking waiver is granted). This is to prevent its misuse in road vehicles.

Red diesel use accounts for 15% of total diesel for the UK. The reduced rate costs around £2.4 billion a year in revenue compared to if duty was charged at the main rate.

What’s changing?

From 1st April 2022, you’ll only be able to use red diesel for 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 non-commercial premises – this includes the heating of homes and buildings such as places of worship, hospitals and townhalls; off-grid power generation; and non-propulsion uses on permanently-moored houseboats
  • for maintaining community amateur sports clubs as well as golf courses (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 (including caravans) of travelling fairs and circuses.

The measure will also extend fuel duty to biodiesel, bioblends and fuel substitutes used in heating, applying the rebated duty rate to non-commercial heating and the full rate of duty to commercial heating. Consequential changes to covering penalties for contravening restrictions on the use of rebated fuels will also be made. The legislation will provide for secondary legislation to enable HMRC to disapply its powers to seize vehicles or other machinery in certain circumstances.

How will it affect your business?

Sectors and applications that don’t fall into the above categories – which includes our construction, and manufacturing customers, as well as a number of transport and logistics uses – will no longer be able purchase or use red diesel from 1st April 2022. You will need to switch to an alternative fuel, and you will need to ensure no trace of red diesel remains in your tank and supply lines by the 1st April 2022 deadline.

What you need to do now?

Given the impending deadline, it’s advised to get ready now.

If your business operates in one of the many affected sectors (including construction, manufacturing and certain transport and logistics uses), you’ll need to get ready now for the upcoming changes by:

> Planning how you’ll replace your red diesel with an alternative fuel option

> Running down your existing red diesel stock before 1st April 2022 (there will be no grace period thereafter)

> Cleaning your red diesel tank – you’ll need to flush out the tank and supply lines until no trace of marked rebated fuel remains. This will help to ensure compliance and minimise the risk that your new fuel is contaminated with the red diesel marker.

Penalties for non-compliance

To ensure compliance, red diesel users must run down existing stocks of red diesel before 1 April 2022. If vehicles and machinery are found with red diesel marker in fuel supplies after this date, they could be seized, as well as the fuel. Fuel used in sectors that are no longer eligible will be liable for fines.

How can Merkland Tank help you?

Merkland Tank are experts in tank cleaning and maintenance. With over 100 years of tank cleaning experience, we work with customers across all sectors to carry out specialist tank cleaning, inspection, installation and decommissioning services.

Using state-of-the-art equipment and fully trained technicians, we can ensure your red diesel tank and supply lines are cleaned in a safe, efficient, environmentally-friendly – and most importantly, compliant – manner.

Contact us

To discuss our tank cleaning services in more detail and make sure you’re compliant by 1st April 2022, call 0141 440 6130 or email


24 August 2021
Source: Information taken from GOV.UK – Policy paper ‘Reform of red diesel and other rebated fuels entitlement’ Published 3 March 2021

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