Some take the view that the road to zero emissions is a long one and, in the face of more pressing and immediate day-to-day issues, they can push this particular problem to the back of their minds.
However, one important ‘green’ issue that they need to get to grips with right now is red diesel.
Following the 2020 Budget announcement made law in the Finance Bill 2021, the government is removing the entitlement to use rebated red diesel and bio diesel from most sectors with effect from April 1 this year.
The 2021 policy paper reads: “…to help meet its climate change and air quality targets. The tax changes will ensure that most users of red diesel use fuel taxed at the standard rate for diesel from April 2022, like motorists, which more fairly reflects the harmful impact of the emissions they produce. Removing most red diesel entitlements will also help to ensure that the tax system incentivises users of polluting fuels like diesel to improve the energy efficiency of their vehicles and machinery, invest in cleaner alternatives, or just use less fuel.”
The use of red diesel will no longer be allowed in transport refrigeration units (TRUs) and, as of 12.00 am on 1 April, it will be an offence to operate TRUs on red diesel.
The new law will be policed and enforced in the same way as all other road-going vehicles. HMRC has produced guidance on red diesel, but it has wide-ranging and punitive powers including the ability to seize vehicles and criminally prosecute offenders.
Make no mistake, HMRC will use these powers!
With the red diesel duty rebate currently at 46.81p per litre, operators will have to find at least an extra £2,000 a year per vehicle (assuming an average use of 1,500 hours per annum, and an estimated 2.85 litres per hour consumption).
However, the scenario is even bleaker. They should brace themselves for even bigger cost increases in the future. The price of DERV remains stubbornly high, with little political incentive to reduce it as legislators look to support a transition away from fossil fuels.
The holy grail for the next generation cold chain is to operate carbon neutral and remove its dependence on fossil fuels and F gasses entirely. It’s hard not to see the writing on the wall for an industry stalwart; is it RIP the diesel-powered fridge?
Diesel substitutes such as HVO have some merit. Whilst HVO is a very easy substitute with excellent green credentials, it’s not cheap and, given that the most efficient diesel TRUs operate at an equivalent to Euro 5, they emit substantially more NOx particulates and CO2.
Whilst operators may well be able to pass on some of the increased cost to their customers, tailpipe emissions are the real issue, and many consumers want a much quicker route to zero emissions. However, this will all come at a cost - a cost that might seem out of reach for some operators.
Historically, return on investment has always been the driver in business; now we see refrigeration technology being dictated by environmental impact and carbon footprint placed ahead of financial returns.
Here at Dawsongroup truck and trailer, we’re aware that the pace of change will lead to the early obsolescence of high-value assets. At the same time, however, we’re committed to supporting diesel and the existing technology for as long as it’s viable.
Also, we recognise that we have a role to play in helping businesses acclimatise to change and supporting them through the transition with our knowledge and expertise.
Our business is focused on putting new technology into practice - delivering affordable, dependable and sustainable alternatives, and helping businesses achieve a cleaner, greener future - right now.
We’ve been working with alternative refrigerants and refrigeration technology for the last 20-plus years. We’ve been at the forefront of advances, assisting with pioneering truck-mounted generators, direct-drive refrigeration, the revolutionary Dearman concept, through solar and now fully electric refrigerated trailers.
It’s no surprise then that we’ve recently placed the first order from a rental/contract hire operator for Carrier/Gray & Adams eCool refrigerated trailers. These will be arriving on fleet in the first quarter of this year, joining what is probably already the largest direct-drive refrigerated rental/contract hire fleet in the industry.
So, what can you do? With over 45 years’ experience catering for all our customers’ truck and trailer needs, our advice is to:
Act now and consider carefully your operating strategy. How long will it be before the trucks you buy today, and the technology they run on, become redundant? How will changing technology and legislative requirements impact on the value of assets that are already depreciating quickly?
Get help and advice to transition to alternative fuelled vehicles. Changes in this area are already here and, as an operator, you can’t afford to stick your head in the sand.
The big changes ahead come with the potential for big risks, big capital outlay and big mistakes. As an experienced fleet provider, we can help you through your decision-making process and make your road to zero risk-free.
We’re already doing a lot of the hard work – investing in new technology, trialling new kit and taking the associated risks – all so that you don’t have to.
Change your relationship with your depreciating assets. De-risk your business by moving from ownership to usership.
Our leasing and contract hire services give you access to assets without the hassle of buying, owning or disposing of them. They:
- Provide easy and flexible access to emerging technologies.
- Avoid any risks or costly mistakes.
- Protect your capital at no financial risk to your business.
- Allow operational testing – actually in your business – all backed up by our expertise and support.
In the face of rapid change, moving from ownership to usership is an effective way of dealing with that change. It puts your business in the best possible position to ensure its survival and maximise its future growth.
At times like this, partnering with an experienced and solutions-based fleet provider is as important as ever. As always, we’re ready to help – whether it’s mitigating against the imminent red diesel ban or making your journey along the road to a cleaner and greener risk-free and as smooth as possible.
John Fletcher, Managing Director