Red Diesel Update

Post by: Dee White
12 August 2014

Red Diesel

Is The EU Turning Health And Safety On Its Head?

The EU has taken the British Government to court in a determined effort to make UK boating unsafe. Imagine running out of diesel and finding nowhere to fill up.

In my article about red diesel written in 2012 I wrote, “In 2011 the EU opened “infringement proceedings” against the UK regarding the EU Marking Directive which relates to the availability of red diesel in the UK for private pleasure craft. The RYA claimed that the EU were bullying UK sailors in spite of the Government having agreed a deal which allowed sailors to pay a part tax on 40% of their diesel used for heating and the full tax on the other 60%. But the EU does not agree with yachtsmen using red diesel for propulsion at all”.

In May 2013 the European Commission issued the Reasoned Option, in support of its formal request that the UK should amend its legislation on the use of red diesel for private pleasure boats.

In July 2013 Her Majesty’s Revenue and Customs (HMRC) indicated that the UK government intended to challenge this; good news for the RYA and the BMF who have staunchly supported the battle for the use of red diesel. Their reasoning is that if suppliers were obliged to supply only white diesel to private boats it would result in many fuel suppliers having to incur significant costs in installing additional tankage and equipment for white diesel, or deciding to supply only red diesel for commercial use. This would have a huge impact on the availability of leisure diesel along the coasts in more remote parts of the country, especially in those harbours catering mainly for commercial vessels. For inland waterway users the problem is slightly different in that the reduction in availability would make it very difficult for users (especially live-aboard owners), who are entitled to use red diesel for heating and providing electricity).

Following a significant loss of UK traffic, Belgium seems to have loosened their rules concerning leisure craft visiting from the UK. They have stated that any inspections carried out must be undertaken with due consideration that white diesel is not readily available to British leisure craft and that the inspectors must adopt a pragmatic approach. Can we take this as a genuine promise that UK boaters will not be fined, subject to the production of documentation proving that the required excise duties have been paid in the UK?

The culmination of the EU’s infringement proceedings is that they have now decided to refer the UK to the European Court of Justice, on the basis of failing to apply their rules on fiscal marking on fuel. The UK government has not yet received formal notification of the Commission’s position, but this is expected in the next 6-9 months. In the meantime there is no sign that the Government intends to modify its determination to ensure the continued availability of diesel for the leisure boating community.

We already pay some 10% more duty on our diesel, with the 60/40 split, than our EU counterparts, so it can’t really be argued that UK boaters have an unfair advantage. Fortunately for us we have staunch allies in the form of the RYA and the BMF who are continuing to work with the treasury and HMRC officials to keep our red diesel available.

Watch this space for more updates.

Author – Dee White

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