Government warned over red diesel rebate removal

By Aidan Fortune contact

- Last updated on GMT

The FSDF estimates that removing the red diesel rebate would cost the food industry £100m a year
The FSDF estimates that removing the red diesel rebate would cost the food industry £100m a year
The Government has been warned against proposals to remove a rebate for the use of red diesel in refrigerated vehicles.

The proposals, currently under consultation by the Treasury as part of the Clean Air Strategy, are designed to cut emissions, however the Food Storage & Distribution Federation (FSDF) has warned that this will cost the UK food industry more than £100m.

In a letter to Defra Secretary of State Michael Gove, FSDF chief executive Shane Brennan outlined the vehicles that rely on red diesel, particularly refrigerated vehicles that transport food, and how there are few or no alternatives to red diesel, depending on the size of the transport method.

Warned of the consequences

He warned that the consequences of the £100m costs to operators would eventually feed through to the price paid by the consumer, compound pressure on the food industry and hold back innovation in food distribution.

Brennan did applaud the sentiment of the Clean Air Strategy, pledging to work with FSDF members and suppliers of vehicles to come up with innovative alternatives.

He said: “We are fully committed to our responsibilities to find ways to reduce emissions and to playing our part in meeting the ambitions of the Clean Air Strategy. We understand why Government is considering removing the red diesel rebate for equipment like refrigerated units on delivery vehicles, but we urge Ministers not to do it.

‘Would not achieve the stated ambition’

“This policy would not achieve the stated ambition, which is to encourage businesses to switch to new ‘cleaner’ technologies. On the contrary, removing the red diesel rebate would impose unavoidable direct costs on the industry.

“This would not only prevent food distributors from being able to invest adequately in innovation, or even upgrade their equipment, but it would also drive up food prices on the shelves.”

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