A cross-sector letter has been sent to Chancellor Rishi Sunak, urging for a review of tax treatment for red diesel.
The letter, sent by the United Resource Operators Consortium (UROC) and signed by the Chartered Institution of Wastes Management (CIWM), states that the use of red diesel is ‘imperative’ for recycling with the majority of plant and machinery running off diesel powered engines. It says there is no ‘market ready kit’ using alternative fuels.
It also states there is still very limited capacity on the grid to convert sites to run on electric and insufficient infrastructure to power remote sites in rural locations. Where there is scope to tap into supply the cost of conversion is not viable, it says.
“Thus, the idea that users of rebated fuel will be incentivised to seek alternatives is woefully misconceived and premature,” the letter states.
With the entitlement being removed entirely on 1 April 2022 – just three weeks away – UROC says emerging global pressures are ‘compounding matters’.
“The landscape is incredibly different now…” the letter states. “In the unprecedented circumstances over the last two years, the economy has been subject to very large and repeated shocks, against a backdrop of volatile price pressures, a consumer energy and cost of living crisis, disruption to supply chains and shortages resulting in bottlenecks, all exerting an upward pressure on inflation with very uncertain times ahead as the invasion of Ukraine continues.”
Adding more burden to the legitimate waste industry will open the door for unscrupulous operators and result in increased fly-tipping and serious organised crime
UROC states that operators will ‘inevitably’ have to pass the ‘enormous cost’ on to customers, saying that local authorities will ‘bear the brunt’ of this.
This additional cost being passed to consumers will have an ‘adverse effect’, UROC states, with a ‘high likelihood of rising environmental crime’.
“Adding more burden to the legitimate waste industry will open the door for unscrupulous operators and result in increased fly-tipping and serious organised crime,” the letter says.
It also says the impacts will not be restricted to the waste sector and ‘serious concerns’ have also been raised by refrigerated food distribution, road maintenance, construction, mineral products, events and hospitality sectors, amongst others.
UROC is therefore suggesting a ‘phased approach’, which it says ‘would strike the right balance’.
“We cannot argue with the Government’s intentions for the removal of entitlement,” the letter states, “but the brutal reality is that in the absence of viable alternatives and in the current climate the reform amounts to a tax hike and will not achieve the desired environmental outcomes.”
