Is Red Diesel Legal?

[Mick and Pauline]

... and of course there are still a few narrow boats which will continue to be classified as trading vessels - oh well we could always go over to (cleaned) used cooking oil from fish and chip shops etc! Apparently they'll give it away to save their waste disposal costs. Today I heard about a peson who ran an old Mercedes 180D on it for years without problems until customs asked for their cut, but did he pay for all he used?

 

Hi,

 

When the Biodiesel tax level is settled and the size of the consumer market is determined plus the profit margin set by the oil companies, the waste cooking oil will be bought up by them. It will then be filtered and cleaned.

 

They will also get fresh veg oil supplies, oil seed rape for example direct from the farmers, break it down and add to the reclaimed oil waste.

 

It will then be blended with normal sulphur free Derv on a 5% (Bio) to 95% (Derv) basis and sold over the forecourts for vehicles or boats after Jan 2007 if required.

 

So when BioDiesel comes in, the veg oil waste will be worth collecting for reuse by the oil companies and will not be so freely available.

 

M&P.

[salmiron]

Hi RobinR,

 

It's not that straight forward, fuel to be used by inland or sea going craft.

The new tax change if it came in, would only effect "pleasure craft" that means any pleasure craft, sea going or inland that refuelled in the UK would have to pay the new tax from Jan 2007. This is why the island of Jersey is opting out, to encourage the sea going "pleasure boats" to refuel there instead of the UK. Even foreign sea going pleasure craft would have to pay full tax if refuelling in the UK, non EU craft would be able to claim the tax back.

 

The UK inland craft fuel market will become complicated because in areas of commercial craft, River Humber / River Trent and even on the Aire & Calder, red diesel will be legal for them but not the pleasure craft cruising with them. So in areas of heavy commercial craft use, there may be only red diesel available, this would not be suitable for pleasure craft use and they would have to look for another supply.

 

M&P.

 

Very complicated. Pleasure craft would be able to use red diesal for non pronpulsion purposes (heating, electricity generation etc). The complications of supplying both types of diesel to the cut and testing for compliance are all covered in the Customs and Excise (sorry HM Revenue and Customs) assessment document. The document makes interesting reading.

 

http://customs.hmrc.gov.uk/channelsPortalW...tyType=document

 

Sorry about the length of the URL.

 

What I have not found is, when a decision is to be made to submit a request for the extension of the derogation?

[Mick and Pauline]

Very complicated. Pleasure craft would be able to use red diesal for non pronpulsion purposes (heating, electricity generation etc). The complications of supplying both types of diesel to the cut and testing for compliance are all covered in the Customs and Excise (sorry HM Revenue and Customs) assessment document. The document makes interesting reading.

 

http://customs.hmrc.gov.uk/channelsPortalW...tyType=document

 

Sorry about the length of the URL.

 

What I have not found is, when a decision is to be made to submit a request for the extension of the derogation?

 

Hi Salmiron,

 

It must be in the coming parliamentary session because the EU have the final say on whether the derogation stays before the Jan 2007 deadline.

 

M&P.

[Guest]

Very complicated. Pleasure craft would be able to use red diesal for non pronpulsion purposes (heating, electricity generation etc). The complications of supplying both types of diesel to the cut and testing for compliance are all covered in the Customs and Excise (sorry HM Revenue and Customs) assessment document. The document makes interesting reading.

 

http://customs.hmrc.gov.uk/channelsPortalW...tyType=document

 

Sorry about the length of the URL.

 

What I have not found is, when a decision is to be made to submit a request for the extension of the derogation?

Neither have I. This is why we must keep reminding them that we are still here.

[RobinR]

Very complicated. Pleasure craft would be able to use red diesal for non pronpulsion purposes (heating, electricity generation etc). The complications of supplying both types of diesel to the cut and testing for compliance are all covered in the Customs and Excise (sorry HM Revenue and Customs) assessment document. The document makes interesting reading.

 

http://customs.hmrc.gov.uk/channelsPortalW...tyType=document

 

Sorry about the length of the URL.

 

What I have not found is, when a decision is to be made to submit a request for the extension of the derogation?

 

Has the document to which you refer been communicated to our MEPs along with the protestations?

 

On another tack, whilst discussing hybrid cars (petrol/electric versions) it came to my mind ... would a hybrid narrowboat be viable? If a diesel generator capable of meaqningfully charging the batteries whilst the boat was away from a suitable mains power point were to be installed in a battery powered narrowboat, could red diesel be used to power said generator following the expiry of derogationwhere, as unlike on road vehicles, there would be no direct connection to the propulsion device(s) - propellor/road wheels?

 

Another silly question, could adverising be carried on cabin sides / rooves, thus become a commercial enterprise and hence able to continue to use red diesel? (same as commercial vehicles / 40ft trailers parked in fields alongside motorways and main roads). What quantity of goods would a boat need to carry? ... what goods? How much ... etc etc

[dor]

If a diesel generator capable of meaqningfully charging the batteries whilst the boat was away from a suitable mains power point were to be installed in a battery powered narrowboat, could red diesel be used to power said generator following the expiry of derogationwhere, as unlike on road vehicles, there would be no direct connection to the propulsion device(s) - propellor/road wheels?

 

As I understand it, this has already been covered - i.e. if you use diesel to generate electricity which is then either used directly or stored for later use - you do not qualify for red diesel.

 

Now, if you had a BIG bank of "leisure" batteries - and said you watched a lot of TV...........

[William Martin]

I am fairly sure the answer to this question is Yes, but I just wanted to check;

 

Is it ok to run a NB engine on White Diesel - say you ran out of diesel and were able to walk to a garage and buy a can of road diesel, is there any reason why you could not run a boat on it?

[GUMPY]

 

Is it ok to run a NB engine on White Diesel - say you ran out of diesel and were able to walk to a garage and buy a can of road diesel, is there any reason why you could not run a boat on it?

 

Normally yes,

However there are some engines that have problems with the lack of lubrication of ULSD, causing the injector pump to fail. I believe perkins are one.

 

J

[William Martin]

Another quick question - I have just realised the nearest diesel pump is quiet some distance away by water from my boat. If I turn up at a marina with a jerrycan will they fill it with red diesel? Do I need any kind of documentation to prove why I want need it or can they sell it to anyone?

[MikeFarmer]

Question: Is red Diesel legal for boat users? I understand this is agricultural fuel but not legal for vehicles. However, I don't know what the score is concerning boat-owners?

 

This question has prompted me to ask.... why isn't the same relaxation of the tax rules applied to owners of petrol powered boats? Why is it ok for boaters who use petrol to pay exorbitant tax, when diesel power costs so little?

 

It wouldn't seem to be beyond the realms of possibility for some red dye to be added at point of sale, to any cans of petrol where duty hasn't been charged. The same rules about red dye in the tank would then still apply.

 

But then, it would mean the government actually giving us something back... silly me.

[Hairy-Neil]

I've seen boatyards with signs on the diesel pump saying fuel sold direct into boats only. Not sure that its a legal requirement or the yard taking the moral high ground.

[Mick and Pauline]

I've seen boatyards with signs on the diesel pump saying fuel sold direct into boats only. Not sure that its a legal requirement or the yard taking the moral high ground.

 

Hi,

 

I think this is the boatyard protecting it's self against any fall out from selling red diesel that could end up in a road vehicle.

If HM Customs brought a court case against the vehicle owner they could be drawn into the court case.

Not good advertising for the boatyard.

[cheshire~rose]

This is why the island of Jersey is opting out, to encourage the sea going "pleasure boats" to refuel there instead of the UK. Even foreign sea going pleasure craft would have to pay full tax if refuelling in the UK, non EU craft would be able to claim the tax back.

 

M&P.

 

Why does Jersey have to opt out anyway? they are not part of the EU?

[Tiller Slave]

The governmant is " minded" to support the contining of the Red Diesel use on boats in the UK, after much lobbying by BMF and IWA. Also the Revenue believe the £25 million at stake is not worth the bother.

 

The EU commission wants to remove it, as only 5 EU states: UK, Belgium, Finland , Ireland and Malta have red diesel for boats. ( it will remain for agriculture, heating and construction).

 

Of the five Belgium and Ireland probably do not want to continue due to smuggling problems and loss of revenue. Finland has very small difference in duty rates.

 

Leaving just 2 out of 25 states really wanting it.

 

Over 100 derogations are up for renewal on 31 st December , so the best hope is horse trading between states to keep it.

 

In theory commercial boats will still be able to use red diesel - this includes hire boats- if the derogation does not continue.

 

In practice the real issue is will boat yards keep two pumps- one for red and one for white?

Very unlikely as profit margins are low compared to the high cost of installing new equipement.

 

Some boat yards will probably stop selling all diesel as sales for non road use will cease making the supply to boats uneconomic.

 

There is some good news White diesel is what most engines / heaters are designed to run on rather than the red gas oil now supplied. In theory the better quality fuel burns hotter and should improve fuel efficiency- ie mph- and with less black waste and pollution emissions. This will reduce maintanence bills going some way to off set higher fuel charges.

 

Also some road garages beside the cut could/may start selling to boats, so making the market very price competative and reducing the large price variations we currently see.

 

New EU rules on diesel engine emissions will be impossible to meet according to engine manufacturers without whire diesel, so if the derogation is continued it wont be for long.

[Crazy Scheme]

My partner owned the first electric narrowboat. Do a google for silver sail, she still exists. Its the charging that's a nightmare! They used to have to bribe landlords of canalside pubs to 'plug her in.'

Would he go back to electric? If it was practical- yes!

[tomandsophie]

We're nearing the end of the year now - I wonder what'll happen to our beloved red diesel...

If it goes, I see that we have two options:

1. Convert our engine to run on SVO (Straight Veg Oil) using a proper conversion kit (around £500). Might do this anyway, seems like a good idea. Anybody already running on it?

2. I don't know what the official standpoint on this is, but we basically use our engine to charge our batteries and heat our hot water for the majority of the time. We only use it to move every couple of weeks or so when we get water and empty the loo. I wonder if you could have two separate tanks - a small one with white diesel for propulsion, and a big one with red for electricity and hot water. Trouble is, I don't suppose there's any way to prove what you're using your engine for. Or is there?

[david and julie]

2. I don't know what the official standpoint on this is, but we basically use our engine to charge our batteries and heat our hot water for the majority of the time. We only use it to move every couple of weeks or so when we get water and empty the loo. I wonder if you could have two separate tanks - a small one with white diesel for propulsion, and a big one with red for electricity and hot water. Trouble is, I don't suppose there's any way to prove what you're using your engine for. Or is there?

 

You would be able to continue using red for heating and power generation.

You would have to use white for the main engine.

You can use twin tanks as you say-or you could use gerry cans for your red. You may have to do this anyway as red may not be available at boat yards as it may not pay them to stock both variants.

You would not have to prove you are not using red in the propulsion engine-if customs dipped your tank its for them to prove any wrong doing.

[NB Alnwick]

You would be able to continue using red for heating and power generation.

You would have to use white for the main engine.

You can use twin tanks as you say-or you could use gerry cans for your red. You may have to do this anyway as red may not be available at boat yards as it may not pay them to stock both variants.

You would not have to prove you are not using red in the propulsion engine-if customs dipped your tank its for them to prove any wrong doing.

 

Hang on - we are not beaten yet. We can still use red diesel.

There will be time enough to consider the options if and when the law changes.

[david and julie]

Hang on - we are not beaten yet. We can still use red diesel.

There will be time enough to consider the options if and when the law changes.

Hang on???

tomandsophie asked this,

We're nearing the end of the year now - I wonder what'll happen to our beloved red diesel...

If it goes, I see that we have two options:

I never commented on whether it will stay or go-I only answered the question.

[NB Alnwick]

I never commented on whether it will stay or go-I only answered the question.

 

Sorry for jumping straight in.

 

Previous experience with those who write the rules indicates that they do scan forums like this for inspiration and we ought not to give too much away.

 

At this time, there must be a strong liklihood that by putting up a robust objection to any changes (which we have) Westminster may decide to leave things as they are simply because it would be so complicated and provide such a small return as to be uneconomical to spend the time needed to make the changes.

[NB Alnwick]

One more important point on red diesel is that even if it becomes no longer available to us, traces of the fuel will remain in our fuel tanks for a number of years. It may take more than five years before the use of un-dyed full duty diesel will have sufficiently diluted the red dye so as to be is no longer readily detectable. There have already been a number of cases where the owners of British vessels sailing on French inland waterways have been fined because French Customs found TRACES of dyed (red) diesel in their tanks. In many cases these vessels had last filled up in the UK several years earlier!

[WJM]

This whole issue may resolve itself without new legislation - I filled up my boat this weekend and the chandlery bloke told me the hassal of selling red was really getting to him. They already refuse to sell it into jerry cans no matter how genuine the buyer. He says the customs are all over them like rash going through their records. His boss recenly bought a diesel car and that sparked a big investigation! I can see a time when the one pump they have will sell white and they can be done with all the bother

 

It is like the "privitisation" of the waterways; done by stealth rather than high-profile hot-potato legislation. I needed a top up recently and had not got a day to spare to travel to my nearest red pump by boat - so I put a jerrycan of white in instead - the thin edge of the wedge!

[Alastair]

Has the document to which you refer been communicated to our MEPs along with the protestations?

 

On another tack, whilst discussing hybrid cars (petrol/electric versions) it came to my mind ... would a hybrid narrowboat be viable? If a diesel generator capable of meaqningfully charging the batteries whilst the boat was away from a suitable mains power point were to be installed in a battery powered narrowboat, could red diesel be used to power said generator following the expiry of derogationwhere, as unlike on road vehicles, there would be no direct connection to the propulsion device(s) - propellor/road wheels?

 

Another silly question, could adverising be carried on cabin sides / rooves, thus become a commercial enterprise and hence able to continue to use red diesel? (same as commercial vehicles / 40ft trailers parked in fields alongside motorways and main roads). What quantity of goods would a boat need to carry? ... what goods? How much ... etc etc

My fiancee looked into this. Atm, there is a loopwhole, the red can be used for generating electricity. This can be stored in batteries, then taken from the batteries and used for propulsion. Legal as long as the output from the genny isn't directly sent to the motor, but stored.

 

It's just a loopwhole, and as soon as several people do it, the loopwhole will be closed.

[miles beyond]

There is a letter dated October 16th 2006 from John Healey MP, Financial Secretary to the Treasury, on HM Treasury letterhead addressed to Howard Pridding of the British Marine Federation on the matter of "red diesel", or rebated gas oil to give it its official name in treasury parlance.

 

This includes the statement "I am now pleased to confirm that we have submitted our aspplication (to continue the derogation for red diesel in pleasure craft) to the European Commission"

 

It continues: "The next step is for the European Commission to respond to our request for renewal, along with those being submitted by other EU member states. I believe that our application presents a comprehensive and balanced assessment of the impact of removing the derogation, and together adds up to a powerful case for renewal."

 

"Ultimately the EU Council of Ministers must take a unanimous decision on a proposal from the Commission to renew the derogation. In the meantime, we shall take every opportunity to restate our case to the Commission and to impress upon it the importance of this issue for the UK."

 

That is pretty strong stuff by the Treasury who cannot be accused of sitting on the fence on this issue. It is very much due to the continued lobbying by BMF, the RYA and the IWA who produced a wealth of data showing the potential economic damage the ending of the derogation might wreak. The costs woiuld far outweigh the small gain in revenue from white diesel (estimated at no more than £3 million annually - very small change in Treasury terms).

 

I notice in an earlier post that someone claimed that hire boats would be able to continue using red diesel. That is not the case in France I can assure you, and I would suspect that the same is true in other EU states with waterway systems such as Holland and Germany.

 

It does at least seem that the deadline of January 1st 2007 will pass by as the submission of this application by the Treasury appears effectively to be a stay of execution until there is a final decision.

[miles beyond]

 

Another silly question, could adverising be carried on cabin sides / rooves, thus become a commercial enterprise and hence able to continue to use red diesel? (same as commercial vehicles / 40ft trailers parked in fields alongside motorways and main roads). What quantity of goods would a boat need to carry? ... what goods? How much ... etc etc

 

Nice idea, but the next thing that would happen is BW will hit you for a commercial licence which is a shed load more money that a private pleasure licence.