REA calls on Government to extend waste sector’s red diesel entitlement

The Association for Renewable Energy and Clean Technology (REA) is urging the UK Government to delay the removal of red diesel entitlement within the waste sector by one year.

The plea was expressed via a letter addressed to the Secretary of State for the Department for Environment, Food and Rural Affairs, George Eustice MP, which also impelled the government to offer more support for waste sector vehicles that operate with zero emissions.

The call comes in the face of a nationwide ban of red diesel announced in last year’s 2020 Budget, which, once in force from April 2022, will see current users being made to switch to white diesel as part of the Government’s drive to achieve net-zero carbon emissions by 2050. The Government asserts that this change will see an improvement in air quality as industries are forced to improve the energy efficiency of their vehicles.

Members of the REA have reported, however, that operational costs have increased by £1.20 - £2.70 per tonne when switching to white diesel, which is the current profit margin for many waste collection companies. In many cases this hike in cost will have to be passed back on to the producers of the waste, usually local authorities. As such, REA is asking that the waste sector be included as an eligible end-user in the Red Diesel Replacement competition.

The precarious nature of finances across the industry has arisen due to a number of pressures that have impacted the waste sector since late last year. Most notably, recruitment and retention costs have increased due to the ongoing HGV driver shortage, which has led to the prioritisation of certain collections and the subsequent suspension of others – such as food and garden waste – as local authorities have attempted to avert a build up of surplus waste. This has resulted in lower volumes of refuse arriving at waste sites for treatment, ensuing a loss in revenue from gate fees. This lost revenue could have been used to finance the transition to white diesel.

Alongside extending eligibility for waste vehicles to use red diesel, the REA is also requesting that the government introduces direct support for new zero carbon vehicles within the waste management sector. The body claims that this is an area that has been neglected until now, resulting in an absence of cost-effective, permanent, and green alternatives to conventional fossil fuel vehicles and off-road machinery across the industry.

Dr Nina Skorupska CBE, CEO of the REA, commented: “The REA strongly supports the transition to sustainable and renewable fuels, however removing the waste sector’s entitlement to use red diesel risks compounding the financial difficulties of an industry struggling badly due to the HGV driver shortage.

“Recent months have seen food and garden waste collections suspended by local authorities up and down the country. It is unlikely that the pressures that the waste sector is currently facing will improve markedly by April 2022, with our members warning that a switch to white diesel will wipe out their already razor thin margins.

“The Government needs to help the waste sector in the short term by extending its red diesel entitlement, while also putting in place direct support for new zero carbon vehicles in waste management to facilitate a permanent shift away from fossil fuels. This way we can simultaneously maintain vital public services, protect waste management companies, and cut emissions.”