The organisation representing Scotland’s SME resource and waste management sector, Resource Management Association Scotland (RMAS), has warned that plans to end the Red Diesel exemption for several industry sectors will further impact the current cost of living crisis in the UK, and potentially lead to increased waste criminal activity.
According to Scottishfinancialnews, RMAS says the fuel price increases will drive up costs for its members with the impact ultimately affecting consumers.
RMAS has raised concerns that the ban on those companies using subsidised fuel could impact sustainability by driving up the costs of recycling and could lead to increased criminal activity from unscrupulous operators.
In April, a ban on the use of Red Diesel in mobile, static and process plant and equipment for a number of industries is due to come into effect. Sectors affected will include waste management, construction and mining companies, while agriculture, horticulture, fish farming and forestry sector operators will be exempt.
Those sectors entitled to the exemption pay approximately 11p per litre as opposed to the standard rate of 58p per litre.
Although the ban is promoted as a green policy to help the change to sustainable forms of fuel, RMAS says the lack of any viable alternatives will leave most waste and resource management companies reliant on white diesel, increasing operating costs significantly.
72 members of the RMAS, took part in the organisation’s poll which suggested that costs will rise by around 15% with companies facing additional fuel expenses of between £100,000 and £400,000 per year, which RMAS believes could also have a damaging impact on the environment as more illegal operators seek to undercut compliant businesses, leading to increased incidences of illegal waste dumping.
RMAS is urging ministers to delay the ban or provide additional support for the waste management sector, which was excluded from the UK Government’s £40m Red Diesel replacement competition announced in 2021.
Brian Ritchie, chair of RMAS said:
“The ban on Red Diesel comes with good intentions but it’s ill-conceived with no suitable green fuel alternatives available at present. Some of the estimated 15% cost rises facing our members will have to be passed down the line to customers, suppliers, and contractors. This will ultimately hit consumers further contributing to the current cost of living crisis in the UK.
We call on the UK Government to re-think this flawed policy and either delay its implementation or provide additional support to offset its impact on the waste management sector and avoid the economic and environmental consequences that will inevitably follow.”
Robin Stevenson, Managing Director at Hamilton Waste & Recycling, and member of RMAS added:
“The forthcoming Red Diesel ban is being billed as a ‘green tax’ but it has the potential to be quite the opposite. Currently, there aren’t viable alternatives to the diesel plant and machinery we rely on to transport, process and recycle waste on-site. As a result, the only possible outcome is that this tax will increase the cost of recycling and therefore make it less appealing to waste producers.
Our business is already 100% carbon neutral so this blunt form of taxation is only going to damage our ability to recover vital resources and unlock their environmental and commercial value.”