Table of Contents
- Executive Summary 2
- Case Study Introduction 2
- Energy Generator Hire Ltd 2
- Explanation of key points of case study 2
- An introduction to red diesel 3
- The Benefits of using Red Diesel 3
- The consequences of using red diesel 3
- Upcoming reforms to the tax rebate on Red Diesel 4
- Introducing HVO – the clean alternative to Red Diesel 6
- The benefits of using HVO fuel 6
- Who is already using HVO? 6
- Energy Generator Hire 7
- Energy Generator Hire and its use of HVO as an alternative fuel 7
- Silverstone F1 – using HVO to power the largest event at Silverstone in 2021 7
- Latitude – a festival run on HVO in 2021 7
- FAQ’s 9
- Related links 10
- References and Bibliography 10
Executive Summary
Red diesel, currently used by many within the construction, events and manufacturing industry, will soon need to switch their fuel choice to a more sustainable and green solution due to the Reform on tax rebate of diesel. Once the Reform starts, it will make red diesel unaffordable to many industries currently relying on it for their continued fuel supply. HVO is a green and popular alternative to red diesel and is becoming more popular for those looking to commit to protecting the environment.
Case Study Introduction
Energy Generator Hire Ltd
Energy Generator Hire is a respected market leader in the supply and installation of temporary power solutions.
We are a team of dedicated and experienced individuals whose exceptional knowledge coupled with industry-standard equipment and a UK-wide network and infrastructure enable us to deliver outstanding events, high-quality finishes and breath-taking experiences across the UK and EU.
Whether you are looking to dry hire a set of 500kVA generators for long-term use or you need smaller portable generators for your event, Energy Generator Hire has the facilities, expert knowledge, and experience to support you and your requirements. We, alongside our sister companies, can conduct a site visit, provide advice and guidance on the most suitable generators, deliver your required generators with the support of Energy Haulage, install, commission, and sign off your power, so you are safe to use for as long as you need to.
As a brand working within a wider company, we benefit from a large UK base alongside a team of full-time industry professionals and in-house specialist services. The Energy Group are a complete turn-key solution to large scale events and festivals providing a range of services meaning you don’t need to involve a variety of suppliers when planning your event.
Explanation of key points of case study
This case study seeks to advise and educate regarding the Reform of red diesel and suitable fuel alternatives to fuelling our engines. The red diesel reform is due from April 2022 and will impact many businesses that currently rely on red diesel and its lowered duty rate compared with other fuel types.
Who can use this case study?
Many will benefit from this study, from those in the industries looking for advice and guidance to those companies seeking to work with Energy Generator Hire and wanting assurance that we are committed to our corporate social responsibility and the environment.
An introduction to red diesel
1961 was when diesel not intended for use in road vehicles was required to be marked with a red dye and other chemical markers to differentiate from other gas oils used for road vehicles. Marking the red diesel also meant that it could be seen more clearly, and misuse in road vehicles could be prevented.
Whilst there is not much difference between road diesel and red diesel, the red markers differentiate the two due to the significant rebate that users receive when they purchase it, meaning less tax is paid.
Diesel that is not intended for road vehicle use has a rate of 11.14p per litre instead of gas oil used in road vehicles which has a duty rate of 57.95p per litre. For this reason, red diesel was a popular choice to try and get away with using in road vehicles; however, doing so and getting caught could have serious financial consequences.
Red Diesel accounts for around 15% of total diesel for the UK and is currently used by two primary industries:
Agriculture – Tractors and machinery used on farmlands can take advantage of the rebated red diesel. Tractors with red diesel can use the road if it’s to reach other farmland divided by a road.
Construction – Plant types of machinery such as cranes and diggers can be operated with red diesel whilst they are being used on-site. However, the vans and haulage vehicles that deliver the plant machinery to a site cannot use red diesel.
The Benefits of using Red Diesel
Red diesel is much cheaper than other diesel, making it more cost-effective for heavy machinery due to their fuel usage. This reduction in rates and charges has been particularly beneficial to trade industries such as agriculture and construction where funds are needed to roll out a project prior to the project being paid for.
The consequences of using red diesel
As red diesel is no different to other diesel forms other than its artificial colouring, the consequences of using red diesel are the same as using road legal diesel. However, the focus on red diesel is due to the amount that is being used per annum. In the UK, approximately 30 billion litres of diesel is used every year. As red diesel makes up 15% of the total litres, this is around 4.5 billion litres. When you consider that red diesel is mainly used in the agriculture and construction sectors, that’s a lot of fuel each year.
The impacts of diesel on the environment
Emissions from diesel engines contribute to the production of ground-level ozone (source: DERA) Ground-level ozone can damage crops, trees, plants and wildlife. Ground-level ozone also produces acid rain, which affects water sources around the world and the human food chain.
Built-up urban areas are more likely to see increased air pollution due to diesel fumes within the area – particularly if those engines are older models.
The impacts of diesel on society
Fumes from diesel engines can cause severe health conditions, including respiratory illnesses including asthma and COPD. These fumes can also lead to existing heart and lung conditions worsening – particularly in those deemed to be more vulnerable.
Health impacts from harmful emissions put much pressure on hospital admissions, A+E visits, absence from the workplace and school, and premature death. In 2017, a study conducted by Environmental Health Analytics showed that excess NOx emissions were responsible for 38,000 deaths worldwide – most of which in Europe.
Those purchasing diesel cars are also likely to pay an increase to a tax increase for the first year of ownership. The tax increase is due to the government trying to decrease the use of diesel-run vehicles. Not only will there be an increase in tax rates, but there may also be more charges in your area from your local council.
The impacts of diesel on climate change
We are all aware from the increase in news discussions and government plans that climate change is a serious concern worldwide. Diesel engines produce greenhouse gas emissions that affect climate change, resulting in air and water pollution, rising sea levels and damage to ecosystems.
Diesel cars emit more CO2 emissions than their counterpart petrol, and over a diesel vehicle’s lifetime, it is set to emit 3.65 tonnes of CO2 more than a petrol vehicle.
Diesel is more complex to produce, meaning more machinery and materials are required for the refinery process. More machinery means more air and water pollution is created.
Upcoming reforms to the tax rebate on Red Diesel
At the Budget 2020 meeting, the government announced that the entitlement to tax rebates on the use of red diesel for most industries would be removed. The reasoning behind this decision was to encourage businesses to utilise alternative options to using diesel and ensure that companies are paying for the harmful emissions they produce when using red diesel.
Businesses that are going to be affected by the Reform
Construction – plant machinery such as cranes and diggers will no longer use red diesel, resulting in significant cost implications for the construction industry.
Manufacturing – manufacturing plants and facilities need an incredible amount of fuel to run effectively and efficiently throughout the year. This Reform will have cost implications and time implications due to needing to clean out and replace tanks before April 2022.
Logistics – shipping companies, mainly, are using red diesel for their engines – affected within this Reform are the cranes that mobilise the containers to be moved onto the ships.
Whilst the industries above will no longer be able to take advantage of the tax rebate on red diesel, there are still industries where red diesel tax rebates will be permitted. Agriculture, non-commercial heating and commercial boating industries can still claim red diesel at a lower rate.
The Reform to the tax rebate of red diesel comes into full force from 1st April 2022, giving businesses eight months from this summer to source alternative greener options to fuel their NRMM. Those industries affected by the Reform have been advised to stop purchasing red diesel and use their existing stocks up. Businesses have also been asked to either replace their fuel tanks or flush them out to remove the residue red dye to ensure no trace of red diesel is left behind when the Reform comes into play.
Cost comparison – pre- and post-April 2022
To put this Reform into perspective, the table below shows the cost of red diesel vs petrol and other suitable fuels before the change coming up in April 2022:
| Fuel Type | Before Reform per litre | After Reform per litre |
| Diesel | £1.32 | £1.32 |
| Red Diesel | £0.55p | £1.06p |
| Petrol | £1.30 | £1.30 |
| HVO | £0.85p | £0.85p |
| LPG | 0.47p | 0.47p |
What does this mean for those who currently use red diesel?
As you can see from the table above, there are significant cost increases for those currently able to take advantage of the red diesel tax rebate. Once the Reform starts in April 2022, businesses no longer exempt from the red diesel tax will be paying an increase of over 46p per litre for the duty rate of white diesel.
Introducing HVO – the clean alternative to Red Diesel
With diesel seemingly on the out, it is time to search for alternative fuels that don’t damage the environment or our engines. One popular alternative is HVO – hydrotreated vegetable oil – one of the worlds cleanest fuels.
What is HVO fuel?
Hydrotreated vegetable oil (HVO) is a renewable alternative to our current diesel fuel. Due to it being a premium biofuel, up to 90% of harmful emissions like CO2, NOx, PM and CO are removed. These greenhouse gas emissions that we know are incredibly harmful to the environment and humans. HVO fuel can be used in either a clean tank on its own or as a mix with your current diesel; however, once the HVO has been mixed with another fuel, it can lose some of its benefits, so it’s best to use it independently.
While it is important to note from the table above that HVO is more expensive than the current red diesel costs, this depends on the quantities it is bought and the location from where it is purchased. This, coupled with its many benefits, makes HVO a popular alternative to current fuel options.
The benefits of using HVO fuel
There are many benefits to using HVO fuel, and therefore it has become a popular choice for an alternative option to diesel.
- It improves the environment and doesn’t affect climate change
- Storage life of up to 10 years
- Outstanding performance in all weathers
- No sulphur or fossil content.
- 100% renewable and biodegradable
- Reduction of 90% in greenhouse gas emissions
- Meets all current bio legislative requirements
- Reduction in ageing engine oils due to its reduced particulate production
Who is already using HVO?
Many industries are already using HVO as a diesel alternative to keep their engines running smoothly and commit to their corporate social responsibility. HVO can be used in many machines and is already being used in:
- Generators
- Commercial boilers
- Agricultural machinery – tractors
- Construction plant machinery
- Industrial trucks
- Boats and vessels
A large number of UK events are already making the switch to HVO to improve their carbon footprint. Glastonbury, Silverstone and Festival Republic are just some of the big names taking this giant leap forward into changing their fuel usage and protecting the environment.
Energy Generator Hire
Energy Generator Hire can help and support a range of temporary power requirements:
- Dry Hire / Installation
- Advice on temporary site requirements
- Site Design
- Maintenance
- Delivery, installation and commission
Energy Generator Hire is fully compliant with the following Acts and Regulations:
- Electricity at Work Regulations 1989
- IP rated Distribution Equipment
- IS7909 Certification
- NICEIC qualified installers
- 17th Edition IEE wiring regulations
- BS7909
Festivals, concerts, sporting events, weddings, corporate events – it doesn’t matter what type of event you’re running; you’ve already got enough to worry about without adding temporary power to your list. You need to be confident that not only have you got the suitable power distribution to run all aspects of your site but that it’s been installed and maintained by a compliant and experienced team of engineers.
Energy Generator Hire and its use of HVO as an alternative fuel
Energy Generator Hire and its sister companies are committed to reducing their carbon footprint, protecting the environment, and supporting their clients to meet their corporate social responsibility. That’s why they have been utilising HVO as an alternative fuel for over a year and provide this as a suitable alternative to their clients when hiring out generators, providing plant machinery and advising our clients on protecting the environment within their industry.
For more information about how Energy Generator Hire is using HVO as a suitable alternative fuel, please look at the following articles published in August 2021:
Silverstone F1 – using HVO to power the largest event at Silverstone in 2021
Latitude – a festival run on HVO in 2021
Energy Generator Hire is proud to provide suitable alternative fuels not only to their clients but also for use within their machinery and power sources. Energy Generator Hire is committed to its reduction of harmful greenhouse gases that damage the environment and humanity.
We are currently looking into making a complete switch to HVO as opposed to other available fuels. HVO would be used as a suitable alternative across the entire Energy brand, including our vehicles, haulage, plant machinery and for agricultural purposes.
Conclusion
With red diesel set to lose the tax rebate it has enjoyed since 1961, commercial industries such as construction, agriculture and events will be affected by the changes, leaving them with mounting costs and pressure to move to an alternative green fuel like HVO.
HVO is a popular suitable alternative to our current diesel usage and should be adopted by businesses that are serious about reducing their carbon footprint and protecting the environment for years to come.
Energy Generator Hire is already using HVO fuel and has been for quite some time, so if you are looking for a company that is serious about corporate social responsibility as well as yours, speak to Energy Generator Hire today.
Energy Generator Hire Ltd are fully accredited with all standards and regulations required to be a compliant and competent temporary generator supplier. With the most extensive stock in generator products and cabling, nationwide support service, and 24/7 emergency call out, it’s no wonder Energy Generator Hire are leaders in temporary power solutions across the UK.
FAQ’s
When does the red diesel tax reform affect businesses?
The tax reform announced by the Budget 2020 meeting starts on 1st April 2022. This was initially delayed due to the Coronavirus outbreak in March 2020.
What are the requirements when red diesel is no longer an option?
Businesses that can no longer use red diesel as a fuel option have been advised not to buy any more stock, use the existing supplies, and either flush their tank or fit a new tank before the change takes effect. There will be no grace period for those caught with red diesel in their tanks after April 2022.
Is red diesel harmful to the environment?
In short, yes. Diesel of any kind emits harmful greenhouse gas emissions that affect the environment, climate change and human health.
Is HVO a suitable alternative to red diesel?
HVO – hydrotreated vegetable oil is a renewable premium biofuel, with up to 90% of harmful greenhouse gas emissions such as CO2, NOx and PM being removed, making it a very suitable alternative.
Can I use HVO for my plant machinery?
HVO is an excellent option for plant machinery for its versatility, ability to work effectively in all weathers – including the colder months of the year and its shelf life of up to 10 years.
Where can I get HVO from?
If you are looking to incorporate HVO into your business and are looking for suitable suppliers, many companies are increasing their stock levels to supply HVO on a broader scale. Check with your local fuel companies to see if they can support you.
What are the risks of not changing over to a suitable alternative after April 2022?
There are many risks involved in not switching to an alternative fuel after the tax reform. Not only are you running the risk of serious financial consequences if you are caught, including potential court proceedings, but you will not be committing to your corporate social responsibility.
Related links
https://www.nationwidefuels.co.uk/fuel-products/hvo-fuel/
https://www.transportenvironment.org/press/dirty-diesel-also-worse-climate-petrol-cars-study
https://www.energygeneratorhire.co.uk/eco-renewable-diesel
References and Bibliography
https://www.london.gov.uk/sites/default/files/cost_benefit_analysis_full_report.pdf
How to contact us:
Energy Generator Hire,
Aylesbury, Bucks, HP178SX
Freephone: 0800 1512698
Local: 01296 906586
Mobile: 07928 597046
