Recycling: Red Diesel

(asked on 31st March 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to help ensure that small metals recycling businesses are protected from negative impacts following that industry's loss of the use of red diesel from 1 April 2022.


Answered by
Helen Whately Portrait
Helen Whately
Minister of State (Department of Health and Social Care)
This question was answered on 19th April 2022

The Chancellor confirmed at Spring Budget 2021 that the Government would remove the entitlement to use red diesel for most uses from April 2022. This more fairly reflects the negative environmental impact of the emissions produced and helps to ensure that the tax system incentivises the development and adoption of greener alternative technologies.

To support the development of alternatives that affected businesses can switch to, the Government is at least doubling the funding provided for energy innovation through the £1 billion Net Zero Innovation Portfolio. From that portfolio, the Government announced the £40 million Red Diesel Replacement Competition, which will provide grant funding for projects that develop and demonstrate lower carbon, lower cost alternatives to red diesel for the construction, and mining and quarrying sectors. The technologies developed from this programme will also be applicable to other sectors to support decarbonisation, and the Department for Business, Energy and Industrial Strategy is planning a series of dissemination events in the future with industry and other affected sectors to spread awareness about the successes achieved and lessons learned through this programme.

As announced at Spring Budget 2021, from 1 April 2021 until 31 March 2023, companies can also claim 130% first-year capital allowances on qualifying plant and machinery investments.

Furthermore, in recognition of the unique circumstances that are currently pushing up fuel prices to unprecedented levels, the Government announced at the Spring Statement that it is cutting fuel duty on petrol and diesel by 5 pence per litre for a period of 12 months. This is a significant tax cut that will deliver considerable savings to businesses over the next year, including those that use diesel, and is the first time in over a decade that the main rates of petrol and diesel have been cut.

Reticulating Splines