The UK’s largest trade association for renewable energy has urged the Government to delay the removal of the entitlement to use red diesel in the waste sector for one year.
The Association for Renewable Energy and Clean Technology (REA) has written to the Secretary of State for the Department for Environment, Food and Rural Affairs, George Eustice MP, urging him to delay the removal of the red diesel entitlement, while also offering support for waste sector vehicles that are zero emission.
After April 2022 most current users of red diesel – the waste industry included – will have to switch to white diesel instead, a change announced in the Government’s 2020 Budget as part of the drive to achieve net-zero carbon emissions by 2050.
However, since the consultation on eligibility to use red diesel ended in autumn 2020 a number of pressures have impacted the waste sector. The HGV driver shortage has increased recruitment and retention costs, leading to driver shortages and local authorities being forced to prioritise collections. This has meant some councils have suspended food and garden waste collections, resulting in lower volumes arriving at waste sites for treatment and a further financial hit with the subsequent loss in revenue from gate fees.
The REA’s members’ have reported £1.20 - £2.70 per tonne increases in operational costs when switching to white diesel – for many, this is their current profit margin. In most cases the increase in costs will have to be passed back to the waste producer, i.e. local authorities.
Alongside extending eligibility to use red diesel for waste services, the REA are also calling on the Government to introduce direct support for new zero carbon vehicles in waste management. This is an area that has been overlooked up to now, leaving no cost effective, permanent, and green alternatives to conventional fossil fuel vehicles and off-road machinery.
The letter also asks that the waste sector be included as an eligible end-user in the Red Diesel Replacement competition.
Dr Nina Skorupska CBE, CEO of Association for Renewable Energy and Clean Technology (REA), said: ‘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.’