The Chancellor has confirmed that sailors and boaters will still be able to use red diesel to propel their vessels after April 2022

In his 2021 Budget, the Chancellor Rishi Sunak has announced that sailors will still be able to use red diesel to propel their vessels.

Last year, the UK Government announced it would remove the subsidy on red diesel from April 2022, although boaters would still be able to use subsidised fuel for heating onboard.

It followed a consultation with the sailing industry and commercial boat owners after a ruling by the Court of Justice of the European Union (CJEU) in October 2018 that the UK wasn’t complying with the EU Fuel Directive by allowing leisure vessels to use marked diesel.

A similar ruling was made against Ireland, which had green diesel. From 1 January 2020, the use of green diesel to solely power pleasure boats was banned.

In the UK, most marinas sell red diesel on a 60/40 split of full and lower tax rates for propulsion, and heating or power generation

The U-turn by the Government only applies to recreational boaters in Scotland, Wales and England.

In Northern Ireland however, recreational boaters will no longer be able to use red diesel for propelling their craft.

Instead, owners will have to use white diesel.

This is to ensure the UK meets its international obligations under the Northern Ireland Protocol of the Withdrawal Agreement.

It will also align with fuel used by private pleasure craft in the Republic of Ireland, which the Government believes will make it simpler for private pleasure craft users to access the fuel they need if they sail between Northern Ireland and the Republic of Ireland (and vice versa).

The RYA, the Cruising Association and British Marine have all campaigned against the banning of red diesel for vessel propulsion.

The RYA’s Director of External Affairs, Howard Pridding, commented: ‘We are delighted with the Government’s decision on the continued entitlement on the use of red diesel for recreational boaters. Availability of fuel at the waterside and the safety implications that that may have meant for boaters has always remained our primary concern.

‘We have a long history of engaging with Government on this issue, and we are grateful to HMRC officials who have listened and taken pragmatic decisions,’ he continued.

‘However, we are disappointed that the same allowances have not been granted for recreational boaters in Northern Ireland. We will work with our colleagues in RYA Northern Ireland and continue to maintain dialogue with Government on the practical difficulties that it is going to present,’ added Pridding.

Speaking on behalf of the Regulations and Technical Services (RATS) group of the Cruising Association, Colin Heywood stated:

‘As a consequence, the government has accepted that it will not change the treatment of private pleasure craft in Great Britain and we will continue to be able to use red diesel and pay our fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion we intend to use for propulsion.

‘This move is welcomed by the members of the Cruising Association who have always lobbied to have one source of fuel,’ he added.

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Reacting to the announcement on red diesel in the 2021 Budget, the CEO of British Marine, Lesley Robinson, said it was a ‘big success story’ for the marine industry.

‘After months of extensive consultation and discussion with HM Revenue and Customs (HMRC), I am delighted that the Chancellor has today announced that the entitlement to use red diesel will be maintained for all commercial boat operators and for private pleasure craft users in Great Britain,’ she said.

‘This is a big success story for the leisure marine industry and British Marine as the treatment of red diesel beyond April 2022 has been a key issue for our members. I am particularly grateful to colleagues at HMRC for working closely with British Marine, listening to industry feedback and giving the leisure marine sector the certainty needed at this unprecedented time,’ added Robinson.

In Ireland, the Government banned the use of green diesel to solely power pleasure boats from 1 January 2020.

This was despite concerns from the Irish Sailing Association that there was little infrastructure for the dispensing of white diesel, especially along the west and south east coasts, and the move could lead to an increase in boats running out of fuel and requiring rescue.

This article was updated on 4 March 2021 to include the views of the RYA and the CA, and details of the arrangement for boaters in Northern Ireland.

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