Red diesel: Rules and regulations explained

Red diesel is a fuel mainly used to operate off-road vehicles and permitted machinery — although it can also be used to heat houses. Essentially, it is the same as regular diesel but red dye is added to it to identify illegal use.

Red diesel fuel is also referred to as ‘agricultural diesel’, ‘cherry juice’, ‘cherry red’, ‘digger fuel’, ‘gas oil’, ‘marine diesel’, ‘medium diesel’, ‘rebated fuel’, ‘rebated kerosene’, ‘tractor diesel’ and ‘35 seconds’. However, they are all the same thing, meaning the laws regarding their usage apply to them all. 

These rules and regulations have always been tightly controlled but in April 2022 they became even stricter. This is because the government is taking measures to reduce the UK’s carbon emissions. Red diesel accounts for 15 per cent of all the diesel used in the UK, producing almost 14 million tonnes of carbon dioxide each year.

In this article, we’ll take you through these new rules and regulations and explain what the changes mean for different industries. We’ll also advise on how to buy and store red diesel correctly.

What are the rules and regulations regarding red diesel?

In a bid to reduce the UK’s carbon emissions and achieve its 2050 net-zero goals, the government has introduced some new rules and regulations regarding the use of red diesel. 

Certain industries have been banned from using red diesel and will instead have to switch to another type of fuel that is taxed more appropriately, to reflect its harmful impact on the environment.

The agricultural industry is exempt, however, it’s still important to understand what the rules are, to ensure you’re buying, using and storing it correctly. Read on to find out more.

Who can use red diesel after April 2022?

The sectors and applications that are now banned from using red diesel include:

Airport operationsCommercial generatorsCommercial heatingConstruction and road maintenanceLeisureLogistics and haulage, including refrigeration unitsManufacturing, such as ceramics, steel and timberMining and quarryingOil and gas extractionPortsPlant hireWaste management

This means that these industries and applications must now use white diesel, which is taxed at the standard rate.

The industries and applications that are exempt from the new rules are:

Agriculture, forestry, fish farming and horticultureCommunity amateur sports clubs, including golf coursesFuel used for non-commercial purposes, such as heating for off-the-grid households, places of worship and town hallsSailing, boating and marine transport (excluding private pleasure craft in Northern Ireland)Non-commercial power generation, such as hospitals and off-the-grid householdsRail transportTravelling fairs and circuses

You may also be able to use red diesel if you can prove to Her Majesty’s Revenue and Customs (HMRC) that you have a valid reason for not being able to use full-duty diesel. If successful, you will only have to pay the difference in duty between the rebated and non-rebated fuel.

Do the rules for red diesel usage differ between industries?

When using red diesel, there are some things to consider depending on the industry you work in:

Agriculture, forestry, fish farming and horticulture 

Red diesel can be used in agricultural vehicles, special vehicles, machines and appliances.

Golf courses 

Red diesel can be used in vehicles, special vehicles and heating and lighting in and around the golf course.

Rail transport

Red diesel can only be used to propel or stop vehicles that run on rail tracks. It can’t be used for other purposes, like heating or cooling units. 

Sailing, boating and marine transport

Red diesel can be used on all types of boats, engines, and other appliances and machines permanently kept on the boat.

Travelling fairs and circuses

Red diesel can only be used to power funfair rides and for heating and electricity in caravan accommodation.

How is red diesel taxed?

Red diesel is a heavily rebated fuel, meaning that if you’re using it off-road, the tax charged is much lower than other, non-rebated fuels.

Currently, the fuel duty rate on red diesel is 11.14 pence per litre, much less than the 57.95 pence per litre paid on on-road white diesel. Many organisations are now paying an extra 46.81 pence per litre for diesel.

Where can I buy red diesel from?

If you believe you qualify for red diesel, you will need to go to a specialist fuel supplier, as it’s not for general sale. To ensure that you comply with the law, you will need to go through a registered dealer in most cases.

Do I need a licence to purchase red diesel?

You don’t need a licence to buy red diesel, however, you must be an eligible user and you’ll need to sign a Registered Dealers in Controlled Oil (RDCO) form. 

The company selling the red diesel must usually be registered with HMRC and it is their responsibility to ensure that the fuel is being used legitimately.

Which vehicles can use red diesel?

All vehicles, machines or generators that run on regular diesel can also run on red diesel. This is because they’re pretty much the same fuel, apart from the colour.

It’s important to remember, though, that if you run your vehicle on red diesel illegally, it is considered tax evasion and you are therefore breaking the law.

Can I drive on public roads with red diesel?

It is illegal to drive a vehicle on public roads using red diesel unless you are a farmer. But even if you are a farmer there are some restrictions to be aware of:

You can only drive on a public road if it’s to access land that’s divided by the roadYou can only drive up to one-and-half kilometres on a public road

You can also drive tractors, light agricultural vehicles and agricultural material handlers on public roads if you are gritting in bad weather to help your local community to travel safely. This was a rule that was brought in in 2012. Before then, only purpose-built gritters were allowed to run on red diesel to grit public roads, however, this only applied to main roads, which meant that the rural ones would have been left unsafe to travel on.

If you use red diesel to run your car on a farm, you can only drive it off-road and for agricultural purposes.

What are the rules and regulations for storing red diesel on a farm?

The correct storage of fuel depends on the exact circumstances, which is why the following recommendations are only a guideline:

General fuel storage

As well as a fuel tank to store your red diesel in, you’ll also need to buy additional equipment, such as drip trays and pumps. 

A good-quality red diesel storage tank should last around 20 years with proper maintenance.

Structural integrity and maintenance

The storage tank and ancillary equipment must be structurally sound and of a standard unlikely to burst or leak. It’s vital that the base and walls of the tank are impermeable. It’s also recommended to keep the storage tank above ground.

Fuel storage tanks should be well-maintained to avoid leaks and pollution. Regular checks by a professional inspector are recommended to help prevent small issues from becoming bigger problems over time.

Safety zone

It’s a good idea to ensure you keep your fuel storage tank away from areas that could cause harm to the environment. Some places to avoid include a building within 50 metres of a borehole or ten metres from inland or coastal waters. The fuel should also be kept away from areas at risk of flooding.

Remember, though, that if you need to store red diesel, a site survey should be carried out first to ensure that you’re doing it safely and effectively.

What happens if you use red diesel illegally?

As mentioned earlier, a red dye with chemical markers is added to red diesel so that HMRC and police officers can quickly identify and prosecute illegal usage.

While there isn’t a fixed fine for using red diesel illegally, you will be charged a fee for restoring and cleaning your tank and filters to remove the fuel. Your vehicle or machinery may also be seized and you could even have to pay back-dated costs for the difference between the price of red diesel and white diesel over the time you’ve been illegally using red diesel.

HMRC does, however, recognise that there is a transitional period when making the switch. In some cases, non-rebated fuel may be blended with minimal amounts of red diesel for safety and operational reasons, meaning it could still be present in tanks. With that in mind, when investigating illegal red diesel usage, they will take into account the type of vehicle, machine, vessel or appliance, the size of the fuel tank and the rate of consumption. They will work with you if you’ve taken reasonable steps to switch to standard-duty fuels. They will check whether or not red diesel was put into the tank before the rule changes, which is why keeping your receipts and invoices is advisable.

Summary

In a bid to reduce the UK’s carbon emissions, certain industries have been banned from using red diesel. Instead, they will have to switch to another type of fuel that is taxed more appropriately to reflect its harmful impact on the environment. The agricultural industry is an exempt industry, however, it’s still important to understand what the rules are, to ensure you are buying, using and storing it correctly. For example:

Red diesel is not for general sale so you must go to a registered fuel supplier to buy itYou don’t need a licence to buy it, however, you must be an eligible user and you’ll need to sign a Registered Dealers in Controlled Oil (RDCO) formIf you do need to store red diesel, it’s recommended that a site survey is carried out first to ensure you’re doing it safely and effectively

You might also find it beneficial to know that you can drive a vehicle running on red diesel if you are a farmer, but only if it’s to access land that’s divided by the road and you can only drive up to one-and-half kilometres. You can also drive tractors, light agricultural vehicles and agricultural material handlers on public roads if you are gritting in bad weather. And if you use red diesel to run your car on a farm, you can only drive it off-road and while carrying out farming activities.

There isn’t a fixed fine for using red diesel illegally, however, you will be charged a fee for the restoration and cleaning of your tank and filters to remove the fuel. Your vehicle or machinery may also be seized and you could even have to pay back-dated costs for the difference between the price of red diesel and white diesel over the time you’ve been illegally using red diesel.