SCOTLAND’S SME resource and waste management sector was warned by the ORGANIZATION that plans to remove Red Diesel from several industries will have a further impact on the UK’s cost of living crisis.
According to the Resource Management Association Scotland (RMAS), the inevitable rise in fuel prices will cause an increase in costs for its members, with the eventual effect trickling down to consumers. The organization also expressed concern that the ban on fuel subsidisation could have an adverse effect on sustainability, driving up recycling costs and causing increased criminal activity by unscrupulous operators.
The UK Government’s April proposals will see a ban on the use lowered-taxed Red Diesel in mobile and static equipment and machinery for a variety of industries. The new rules will affect waste management, construction, and mining, while agriculture, horticulture, and forestry sector workers will be exempted.
The Red Diesel ban is being promoted by RMAS as a green policy to support the transition to sustainable fuels. However, RMAS claims that the absence of viable alternatives will make most waste and resource management businesses reliant upon white diesel, which will significantly increase operating expenses. A poll of 72 organisations found that 72 percent supported the ban on red diesel. Members predict that fuel costs will rise by 15% and companies will have to pay an additional 100,000-400,000 annually in fuel costs. RMAS believes that this could have a negative impact on the environment, as more illegal operators will try to undercut compliant companies, leading to an increase in fly-tipping and other illegal waste dumping.
The organization is calling for a review of this policy, urging ministers not to ban the sector or to provide additional support. It was excluded from the UK Government’s 40m Red Diesel replacement competition.
Brian Ritchie, RMAS Chair, stated that while the ban on Red Diesel is a good idea, it’s ill-conceived and there are no suitable green fuel options. The 15% cost increases that our members are facing will have to be passed along to customers, suppliers, contractors. This will eventually impact consumers, further contributing to the current UK cost of living crisis.
We appeal to the UK Government for a review of this flawed policy. They should either delay or provide additional support to offset the impact on the waste management sector. This will help avoid the inevitable economic and environmental consequences.
Robin Stevenson, Hamilton Waste & Recycling’s Managing Director, highlighted the concerns of RMAS member businesses. He said: Although the Red Diesel ban is being billed a green tax, it could actually be quite the contrary. There are currently no viable alternatives for the diesel plant and machinery we depend on to transport, process and then recycle our waste. This tax will only increase the cost of recycling, making it less attractive to waste producers.
Our business is already 100% carbon-neutral so this harsh form of taxation will only harm our ability to recover vital resource and unlock their environmental and economic value.
