Red diesel

Background

Marked diesel is diesel which contains a chemical marker and dye to identify diesel which has been supplied at a rebated rate of duty. In the UK marked diesel is commonly called red diesel (after the colour of the dye it contains) to distinguish it from unmarked or white diesel (which is supplied at the full rate of duty). 

Historically recreational craft were able to buy red diesel at the waterside at a rebated rate of duty. However, in the 1990’s and 2000’s European directives introduced a requirement for fuel to contain a fiscal marker if it was supplied at less than the minimum rate of duty and a minimum level of duty that had to be paid on fuel used for the propulsion of private pleasure craft was specified. The intention was that private pleasure craft should only be permitted to use white diesel for propulsion. 

A number of countries, including the UK, were granted a derogation which postponed the implementation of these requirements until 31 December 2006. 

When the derogation wasn’t extended, the UK required (from November 2008) that anyone buying fuel which was to be use for the propulsion of a private pleasure craft had to pay the prescribed rate of duty for it, because of this, red diesel continued to be supplied at the waterside. 

Unfortunately, other EU Member States were dissatisfied with the UK’s solution and in October 2018 the Court of Justice of the European Union (CJEU) ruled that the UK had failed to fulfil its obligations under Council Directive 95/60/EC on fiscal marking of gas oils.

Success 

Assuring the availability of fuel at the waterside throughout the UK has been at the forefront of the RYA’s position for retaining the availability of red diesel at the waterside. 

When the Government announced, in March 2020, its intention to implement the CJEU ruling and require private pleasure craft to use white diesel for propulsion, the RYA continued to put forward robust arguments to demonstrate that while red diesel remained the primary and often only fuel available at the waterside it should continue to be available to recreational boaters in the UK for the purpose of propelling a private recreational vessel. 

A consultation followed and as part of the 2021 Spring Budget announcement, the Government stated that it would not be changing the treatment of private pleasure craft in Great Britain where they would continue to be able to use red diesel and pay their fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion they intend to use for propulsion.

Disappointment

The outcome was different for Northern Ireland. Since 1 October 2021 only white diesel may be supplied for the propulsion of private pleasure craft. HMRC deemed this change necessary to ensure the UK met its international obligations under the protocol on Ireland/Northern Ireland which is part of the [Brexit] Withdrawal Agreement. 

The RYA will monitor the availability of diesel in Northern Ireland for the propulsion of private pleasure craft to ensure that this change does not have a detrimental impact on recreational boating. 

For the latest guidance see: