Your Guide to Red Diesel

In industrial and agricultural operations, red diesel stands out as a top fuel choice thanks to its cost-effectiveness and versatility. This specially rebated diesel is crucial for powering machinery and vehicles in many sectors, ranging from agriculture to marine with many other applications included. It can’t be overstated how essential this fuel is for industries across the UK.

Understanding what red diesel is, its permissible uses and its legal framework is imperative for businesses relying on it. In this post, we’ll aim to provide a comprehensive overview of red diesel for those considering purchasing this versatile fuel.

What is red diesel? 

Also known as gas oil, red diesel is used in machinery and off-road vehicles in specific industries, including agricultural, horticultural, and foresting. 

Red diesel is heavily rebated, meaning the tax charged for its use is much lower than other fuels. Because of this, it is illegal to use in road vehicles and can land users in trouble in terms of taxation.

Why is it called red diesel? 

The name comes from the red dye used in the diesel to give it its colour. This dye is added for identification purposes to prevent the illegal use of the fuel. 

What is red diesel used for?

Gas oil is incredibly versatile, making it a popular choice across many industries. The biggest industries permitted to use red diesel are:

Agriculture

In the farming industry, red diesel fuels tractors, harvesters, balers, and other essential equipment. Tractors are safe from the legal restrictions of red diesel as long as their time on the road is limited, such as crossing a road to get from field to field or a short trip between farm operation areas. 

Marine

Red diesel can be used to power all boats and ships but not for personal vessels, also known as private pleasure crafts. If private boat owners do want to use red diesel, then they must declare how much they plan to use for the boat’s propulsion and pay the full duty tax for the amount.

Horticulture

The art and science of growing ornamental plants, flowers, fruits and vegetables, horticulture is another industry permitted to use red diesel. As with agriculture, tractors may use red diesel while on the road, as long as that time is limited and used for short trips essential for operations. 

Benefits of red diesel 

Let’s discuss the main benefits of red diesel and why it is a popular fuel across many industries.

Efficient

Red diesel’s performance is identical to white diesel, which is used for road vehicles. These two fuels share the same efficiency, making it an ideal choice for those looking for a simple fuel they can rely on.

Cost-effective

Red diesel is more affordable than standard diesel due to its lowered tax rates. This makes it perfect for businesses looking to reduce their operational costs. These businesses must fall under the industries permitted to use red diesel.

Widely available

The ease of access to red diesel makes it the first choice of agricultural, horticultural, and rail, industries, as well as for use in non-commercial electricity generation, forestry, and even community sports clubs and golf courses.  

Legal considerations and regulations

The industries and applications legally allowed to use red diesel are as follows:

• Agriculture, horticulture, fish farming and forestry. This includes agricultural vehicles used for cutting verges, as well as vehicles for road gritting and snow clearance.
• Propelling passenger, maintenance, or freight vehicles that run on rail tracks.
• Electricity generation and heating in non-commercial premises such as homes, places of worship, town halls, and hospitals. Red diesel can also be used for off-grid power generation and permanently moored houseboats for non-propulsion uses.
• Community amateur sports clubs and golf courses for ground maintenance, as well as the lighting and heating of changing rooms and clubhouses.
• All marine vessel refuelling and operating in the UK, which includes water freight and fishing. This does not include propelling private pleasure vessels in Northern Ireland.
• Powering machinery and caravans used in travelling fairs and circuses.

The penalties for misusing red diesel vary but include monetary fines, vehicle and equipment seizure, backdated tax charges, and even criminal charges for significant or repeated offences. To learn more, visit the gov.uk site for more details on the government’s responses to illegal red diesel use.

Compliance requirements

To comply with the government’s regulations and laws on red diesel, it’s important to have the following:

• Detailed records. This includes keeping accurate records of all red diesel purchases, such as receipts and invoices. Detailed usage logs and storage records should be kept, documenting the machinery and vehicles the fuel was used for, and the conditions of the storage facilities.
• Licenses and permits. All of the necessary documentation should be kept, including copies for inspection. 
• Audit trails. Fuel records should be regularly reviewed and reconciled against usage and purchase logs to help identify discrepancies. 

Ensure all of these are easily accessible for review by regulatory bodies and HMRC.

Red diesel, supplied by Fuelsource

Red diesel remains an essential resource for various industries, offering significant cost savings and benefits when used within legal boundaries. While it provides great savings, it’s important to stay on top of the legal guidelines to avoid trouble. By keeping up with the regulations and maintaining clear and details records, businesses can enjoy the benefits of gas oil without consequences.

If you’d like to introduce red diesel to your operations, don’t hesitate to get in touch. Here at Fuelsource, we are experts in all things fuel, from sourcing to delivering, including managing your levels from our base of operations. Call us today on 0207 846 0255 or use our simple online form to find out how we can help get your business running smoothly on the best fuel available.