RMAS calls for sector inclusion in red diesel competition

The Resource Management Association Scotland (RMAS) has slammed the government for not including the waste sector in the £40 million red diesel replacement competition.

Opened earlier this month by the department for business energy & industrial strategy (BEIS), the competition aims to “support the development and demonstration of low carbon fuel and system alternatives to red diesel”.

A lot of heavy machinery uses red diesel as fuel, and some companies have warned that the tax relief cut will raise costs

This will be done through two round of funding to successful applicants, with the first totalling £10 million.

However, any successful projects will only be available for the construction, mining and quarrying sectors.

The RMAS is calling for this competition to be extended to the resource and waste management sector – we as a sector will be significantly impacted when the loss of entitlement – Brian Ritchie chair of the RMAS

Question

In a statement today, RMAS called on BEIS to include the waste and recycling sector in the scope of the competition, saying the challenges faced by the waste sector are equal to others.

Brian Ritchie chair of the RMAS and director of the Highlands-based waste management firm, David Ritchie & Sons, said: “The RMAS is calling for this competition to be extended to the Resource and Waste Management Sector – we as a sector will be significantly impacted when the loss of entitlement comes into force with running costs expected to double. This recent exclusion will also further impact on our sector’s ability to remain competitive in an already challenging marketplace – where is the level playing field?”

RMAS added that for most mobile static and process plant and equipment, options to switch to alternative fuels are “extremely limited and still several years away”. The group said this is primarily due to the lack of viable alternatives which meet the power, torque and operating time requirements associated with managing heavy loads of waste and recycling.

Tax

In the 2020 Budget, the government announced plans to scrap the lower rate of fuel duty on red diesel —which many operators use to power machinery — to bring it in line with ordinary diesel which is liable for the standard rate of fuel duty.

The government says those entitled to use red diesel pay a duty rate of 11.14 pence per litre, which is “significantly less” than those using standard road fuel diesel, which has a duty rate of 57.95 pence.

The waste sector had lobbied to be exempt from the rules like the agricultural and fisheries sectors are, arguing the tax would increase the cost of recycling and encourage landfill.

In March however, the government said it found no compelling evidence that this would be the case (see letsrecycle.com story).

Useful links

Register your interest for the Red Diesel Replacement competition

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