Red diesel ban update – the hidden impact of the Government’s stealth tax

April 2022 marked a complete ban on red diesel on almost any plant and machinery in the UK, except in very limited circumstances. Whilst raw material costs are already soaring for the construction industry, the Government’s move to ban red diesel has also significantly impacted many other industries. Waste management for example, is an essential service which has been stealth taxed as a result of the red diesel ban as most large machinery at waste transfer stations are run on diesel and cannot easily be converted to renewable sources of energy.

It’s not just the construction industry which heavily relies on waste removal services such as skip hire and waste removal. Almost every sector has a regular waste stream – hospitality, retail, entertainment and even small businesses all require a method of disposing of packaging, old supplies and general mixed waste in order to operate. Paul Bennett, Commercial Director of Reliable Skip, a skip hire company with national coverage states:

“The situation is quickly becoming a crisis – we seen an exponential increase in costs at waste transfer stations which process any waste collected from both commercial and residential skips. April 2022 saw an immediate increase of approximately 10% in the cost of skip hire and the switch over to white diesel means all of the plant machinery is now using white diesel. This now means that we are at the mercy of the retail pump prices.”

With the out of control fuel prices the country is currently experiencing, a further 5% increase is also predicted in the waste management industry in as soon as September. This will bring the total increase to a staggering 15% rise in just 6 months. It’s unlikely to be the end of the rise as waste management services struggle to handle increase in staffing costs, driver shortages and further constriction on landfill sites.

Aside from these costs being passed on to the end-consumer, the impact is now becoming an environmental crisis too. In 2020/2021, fly tipping has seen the largest increase on record with an increase of 16% in 2019/20. Most concerning is the rate at which the commercial fly tipping has increased; this is often ‘end of life’ waste which is destined to go straight to landfill and is very expensive to dispose of. There was an increase of 11% from the 56,000 incidents reported in 2019/20, indicating that smaller skip companies and even businesses are directly tipping waste illegally, ultimately damaging the environment and causing a health hazard.

Unless the Government steps in to address these issues at the source of the problem, these rates are likely to be the start of the problem. As the cost of living continue to rise, both consumers and businesses are becoming more desperate to save money and cut costs, the impact of which is the environment and even more increases in waste disposal costs.