From 1 April, the government reduced the list of businesses entitled to use red diesel, which many operators use to power machinery, and excluded the waste sector (see letsrecycle.com story).
Lee Rowley, the parliamentary undersecretary for BEIS, said on 26 April in answer to a written question that the metals recycling sector was eligible for support through the £289 million Industrial Energy Transformation Fund (IETF) and the £34 million Scottish IETF.
These programmes provide capital support to industrial sites, Mr Rowley said, “helping them to become more energy efficient and to switch away from fossil fuels to lower carbon alternatives.”
He said: “We have recently promoted this funding opportunity with the British Metals Recycling Association, welcoming applications from sites impacted by the removal of the red diesel rebate.”
According to BEIS, if a business carries out the “recovery and recycling of materials” (SIC code 38320) at an existing site then it is eligible for the funding. However, the deadline for applications under the second phase of the funding is today (29 April) at 3pm and it is unclear whether it will be available to the sector in the future.
And, the BMRA told letsrecycle.com that the funding would not mitigate the impact the loss of red diesel entitlement for the recycling sector.
Discussions
Trade associations from across the waste sector expressed concerns about the timing of the Treasury’s plans to scrap the industry’s eligibility to use red diesel, with several even comparing the reforms to a “stealth tax” (see letsrecycle.com story).
Conservative MP Henry Smith submitted his written question to BEIS on 14 April, asking what recent discussions the department had with representatives of the metals recycling sector on the potential impact of the loss of their entitlement to use red diesel.
In his response, Mr Rowley said the government “recognised” that the changes would be “significant” for some businesses.
BEIS ran a consultation to gather information from affected users on the expected impact of the tax changes, he said, and the government “carefully analysed” all the responses, including a submission from the BMRA.
Funding
Antonia Grey, head of policy and public affairs at the BMRA, told letsrecycle.com that her trade association worked with BEIS to inform its members how they could access funding to help decarbonise their operations, “having been successful in getting recycling added to the list of eligible sectors for phase 2 of the IEFT.”
She said: “Phase 2, which closes on 29 April, covers improvements made within the site boundary, which includes the electrification of plant.
“Unfortunately, this will not mitigate the impact the loss of red diesel entitlement for the sector.
“With that in mind and given some 30% of our members are either not connected to the grid or cannot draw enough power, we are continuing to liaise with the BEIS team to demonstrate the need and benefits of including funding to cover site electrification in Phase 3 of the IETF.”
Related link
Industrial Energy Transformation Fund (IETF) Phase 2: Spring 2022 – how to apply
Subscribe for free