FSDF – red diesel ban could cost £100m

According to the Food Storage and Distribution Federation (FSDF), Government proposals to ban the use of red diesel to power refrigeration units on HGVs will add more than £100 million to the annual operating costs of food distributors.

The new government proposals come as part of its clean air strategy. The changes, according to the FSDF will inflate food prices and reduce the investment in the normative food storage technologies.

FSDF chief executive Shane Brennan has written to the environment secretary Michael Gove, where he set out the misunderstandings that have been propagated about how many diesel powered fridge units are used on the U.K.’s roads and the overall contribution that they make to air pollution nationally. The removal of the red diesel rebate would at least add £100 million a year to the operating costs of food distributors.

Red diesel is well known for being supplied to farmers, but is also supplied outside of agriculture. It is taxed at the rate of 11.14p per litre as against 57.95 p per litre for standard diesel. It is estimated to account for around 15% of all diesel consumption in the British Isles.

Brennan said: “We are fully committed to our responsibilities to find ways to reduce emissions and to playing our part in meeting the ambitions of the Clean Air Strategy. We understand why Government is considering removing the red diesel rebate for equipment like refrigerated units on delivery vehicles, but we urge Ministers not to do it.

“This policy would not achieve the stated ambition, which is to encourage businesses to switch to new ‘cleaner’ technologies. On the contrary, removing the red diesel rebate would impose unavoidable direct costs on the industry. This would not only prevent food distributors from being able to invest adequately in innovation, or even upgrade their equipment, but it would also drive up food prices on the shelves.