23 October 2020

Biodiesel more effective

In line with our work on sustainability, we believe that increased use of biodiesel would be more effective at reducing emissions in the longer term. We think that red diesel should be retained until there is wider distribution and use of biofuels. It is also likely that the cost to Government of introducing and managing the proposed change will exceed any additional income from the increased taxation.

Impact on waterways businesses

A key concern of the proposals is the impact on suppliers (including boatyards and fuel boats). The likelihood that many businesses may decide to stop selling diesel altogether would make it difficult to obtain fuel in some areas. We also object to waterborne freight not being given the same right to continue to use red diesel as railways, as this is likely to drive more cargo on to the roads. Roving fuel boats will see increased operating costs, despite the essential service they provide. This would threaten a loss of livelihoods as well as an important aspect of living waterways heritage.

Tax relief on white diesel

We welcome the proposed tax relief on any white diesel used for domestic use, with the supplier becoming responsible for claiming the rebate rather than the current self-declaration process. Previous research has indicated fuel typically used 60% for propulsion and 40% for domestic requirements. However, we believe the new relief scheme should allow a flexible rate to accommodate fluctuations throughout the year, and variation between boaters who use a lot of fuel for propulsion and those who use less.

Tank flushing

While boats with separate tanks could continue to use red diesel for non-propulsion uses, it is unlikely that suppliers would continue to sell both types of diesel. There is also concern that although boat-owners will not be required to flush their tanks to remove any red diesel dye, it is proposed that suppliers will have to flush their tanks and we think this is unnecessary and unhelpful.

Charity exemption

There is also an increased cost to registered charities who were previously able to use red diesel at the full rebated rate. Their activities include getting disadvantaged or disabled children afloat or operating trip-boats to raise funds for restoring a waterway restoration. We believe that charities should also be exempt.