The Association for Renewable Energy and Clean Technology (REA) is urging the Government to postpone the proposed changes to red diesel policy for five years until 2027.
The waste sector is set to lose the entitlement to use rebated fuel (red diesel) from 1 April, a move which the REA says would likely result in businesses having to make redundancies or cease trade entirely.
The agriculture and horticulture sectors remain eligible for red diesel.
The REA argues that, without an alternative to diesel currently available to the organic recycling sector, the change will dramatically increase costs to businesses while simultaneously failing to deliver the intended environmental benefits.
The policy will also create unfair competition, according to the REA, because some on-farm AD and composting sites will be able to charge lower gate fees for accepting waste than off-farm sites who cannot.
‘While we strongly support the transition to sustainable and renewable fuels, removing the organics recycling sector’s entitlement to use red diesel at this time would add an unacceptable and unaffordable financial burden on businesses which are already facing a perfect storm of worsening cost pressures,’ said Jenny Grant, head of organics and natural capital at the REA.
‘We have been in constant contact with our members who are warning about the impact this change would have on their business. Businesses are facing incredibly difficult decisions, with many saying they will have to make redundancies or even cease trading entirely.
‘That is why we are urging the Government to delay the proposed reform to red diesel policy for five years until 2027 to enable the development of viable alternative-fuelled vehicles and machinery.’