The Cruising Association (CA) is delighted that the government has reviewed its proposals for the reform of UK red diesel regulations for marine craft, as announced in yesterday’s Spring Budget. It has concluded that removing the entitlement to use red diesel in the commercial sector, including water borne freight, ferries, fishing vessels, operating at sea or inland, would have had a detrimental effect on their finances and viabilities.
The entitlement to use red diesel in these sectors has been kept by HMG beyond April 2022, as otherwise marinas and ports would have had to stock two colours of diesel. This would have been uneconomic. In a successful lobbying campaign alongside the RYA and British Marine, the Cruising Association argued successfully that having two colours of diesel would cause fuel supply problems and impacted on safe sailing in the UK.
Speaking on behalf of the Regulations and Technical Services (RATS) group of the Cruising Association, Colin Heywood stated:
"As a consequence, the government has accepted that it will not change the treatment of private pleasure craft in Great Britain and we will continue to be able to use red diesel and pay our fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion we intend to use for propulsion. This move is welcomed by the members of the Cruising Association who have always lobbied to have one source of fuel."
The decision allows for easy refuelling in England, Wales and Scotland for safe sailing and will avoid the logistical and environmental difficulty for the fuel supply industry of changing from red to white diesel.
For heating purposes, a vessel with a separate tank will still be able to use red diesel at the lower duty rate. The percentage relief scheme for heating use for a craft with one tank is to be announced by HMRC.
In Northern Ireland private pleasure craft will no longer be able to use red diesel for propulsion through the 2018 Court of Justice of the European Union ruling and the obligations under the Northern Ireland Protocol of the Withdrawal Agreement. HMG expect the change to white diesel to be in force by June of this year.
For the fuel suppliers, CA members and others who keep their boats in Northern Ireland, who may visit Great Britain, the extremely short time for transition will produce the same changeover problems previously submitted to HMRC.
The Cruising Association will now be talking to HMRC to clarify their exact details, so as to establish a timescale to accommodate the change.
4 March 2021