In a letter sent to the Chancellor, Rishi Sunak, Ward operations director Donald Ward said that with gas prices “spiralling” after Russia’s invasion of Ukraine, support should be “leveraged” to the industry.
Mr Ward said the Treasury should postpone the changes “for at least 12 months”.
He also warned it could lead to companies signed into fixed-term contract going into liquidation and more waste going to landfill as metal recyclers turn away lower value materials.
This comes ahead of the Chancellor’s “mini-budget” on Wednesday where he has hinted that fuel duty could be slashed to help with the UK’s cost of living crisis.
On 1 April, the Treasury is set to reduce the list of businesses able to use red diesel, and has so far rejected calls from the waste sector to delay this.
In the letter, Mr Ward says Ward Recycling, which employs over 400 people and has an annual turnover of £200 million, believes fuel prices will rise by as much as 70% if the changes are introduced as planned on 1 April.
We are completely reliant on diesel for our processing equipment
- Donald Ward
Consumers
The letter called for the changes to be delayed by 12 months.
It warned that the increased costs could see the UK could face a situation where businesses turn away items such as end-of-life vehicles and waste electrical and electronic equipment (WEEE) because it would not be worth taking them in.
“This would increase waste to landfill, increase uncontrolled disposal of hazardous waste and reduce supply to the manufacturing supply chain,” the letter said.
Mr Ward added: “In the short term and given the threat nationwide to all businesses and the impact on wider industries, we are writing to request you implement an extension to the entitlement to use red diesel for 12 months or a time the energy markets have settled.
“If this implementation is not possible, could we suggest a phased approach as we are now in a completely different economic climate, and this could be disastrous for many waste and resource operators.”
He added that there is a “real risk of liquidation” for many firms.
Sector
The letter from Ward follows a similar one sent by UROC, the skip hire trade association, co-signed by a string of waste trade associations (see letsrecycle.com story).
The letter warned that the market for alternative fuels to red diesel was not yet viable for operators to turn to for alternatives.
Hope of change however is slim. Many operators have spent thousands preparing their fuel tanks for the changes, which are now just nine days away from being implemented.
All eyes will be on the ‘mini-budget’ this Wednesday to see if the Chancellor has a last minute change of heart.
Useful links
Plea to postpone rebated red diesel fuel tax for 12 months
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