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Red Diesel Ban for the Construction Industry: What does it mean for the plant and access hire sector?

Posted November 30, 2021

It’s November 2021 and the British plant and access hire sector is in boom despite a race to keep up with a succession of changes.

Demand for plant and access machines is high as the construction industry attempts to catch up with work delayed during the pandemic and a wealth of new projects.

Despite the peak in demand, it hasn’t been plain sailing for most.  Plant and access hire companies are increasingly pressed to provide low emission machines for use in a growing amount of low emission areas and Clean Air Zones.  Recent construction trends have created a surge in demand for very specific super-sized machines that are in short supply, and Brexit trade restrictions have complicated the import of new machines.

As plant and access hire providers power on, trying to navigate this tricky terrain, they are also being hit by the Europe-wide gas shortage that has generated important supply chain issues and pushed energy prices to record highs.

At the moment of writing, the cost of diesel in the UK is at an all-time high, having hit a new record price of 147.94 ppl at the end of October, the highest recorded price since April 2012.1

Under mounting pressure, the construction industry and plant and access hire providers face yet another challenge: the UK government’s ban on red diesel as of April 2022.

What is Red Diesel and what is the Red Diesel Ban?

As those in all affected industries are aware “red diesel”, used widely across agriculture, fishing, logistics and construction industries (amongst others) is diesel sold with a reduced tax rate of 11.14 ppl and marked with red die to differentiate it from regular commercial “white diesel”, which is encumbered with a hefty 57.95 ppl tax rate.

Until now, most industries that could justify the use of diesel as a core necessity of their business were granted the reduced tax rate, but that is about to change.

On the 16th of November 2021, the British Government updated The reform of red diesel and other rebated fuels entitlement .2

With this policy change the British government brings in restrictive measures on the use of fossil fuels with a clear view to lowering carbon emissions and meeting the legal commitments entered into in June 2019, by which the UK guarantees to end its contribution to global warming by 2050.

Who is affected?

A key factor of this policy is that it doesn’t prohibit the use of red diesel by machine type, but rather by industry type: that it to say that non-road mobile machinery (NRMM) such as excavators will be banned from using red diesel when in use by the construction industry, yet the same machines will retain the right to use red diesel when working in the agricultural sector.

Very importantly, as an October 2021 article published in “The Construction Index” points out: the construction sector will also lose permission to use rebated red diesel for commercial heating and power generation, for example when using mobile generators on construction sites.3

At a time of pre-existing inflation and soaring fuel prices, the measure is a huge blow.

Turning to alternative fuels, is HVO a possible solution?

Alternatives to diesel have existed on the market for some time and a number of industries have already started adapting their fleets to the use of biofuels.

Although other options exist, the most popular alternative fuel for use with heavy goods vehicles (HGVs) and non-road mobile machines (NRMMs) is HVO.

HVO stands for hydrogenated or hydrotreated vegetable oil.  HVO is made by reacting vegetable or other fats and oils with hydrogen at high temperature and pressure. This type of oil ignites easily and offers a more complete combustion than traditional fuels, resulting in lower emissions. HVO is a popular alternative to gas oil diesel as it is a “drop-in fuel”, meaning that it can be used with most diesel engines without the need to make any modifications.

That said, not all manufacturers certify their engines or machines to be used with HVO, so NRMM users should proceed with caution and check with manufacturers as the use of this fuel could invalidate machine warranties.

Does HVO reduce engine emissions?

In short, yes. HVO is second generation biofuel which, on the whole, offers a far cleaner emissions profile than diesel. A 2018 study 4 carried out in engines using HVO found that engines running on this fuel showed a cleaner emissions profile than engines running on conventional diesel with the exception of inconclusive data retrieved on tests for NO2 emissions; however it was proposed that performance on this point could be improved by adjusting engine calibrations.

What are the possible drawbacks?

Although HVO is a cleaner technology and advances will surely be made over coming years improving its properties, a large multi-industry change over from diesel to HVO would encounter important issues of supply, as the UK’s distribution infrastructure is currently lagging behind demand; but HVO does compensate for this point by offering the flexibility of blending with diesel.  Proportions are dependent on the engine.

As for price, the use of HVO (or other biofuels) is not currently being incentivised by the British government. Although it is a better alternative, it isn’t a cheaper alternative. General consensus across the industry is that time has come to make environmentally friendly alternatives more widely available, so hopefully mounting pressure will result in policy changes that will pave the way to a cleaner, more energy efficient industry.

What solutions are there for access and plant hire companies?

Although good intentions may prevail, many plant and access hire companies will be forced to make a change to white diesel for the sake of not invalidating their machine warranties.

However, some companies with larger and more varied fleets consider that a possible alternative is to run electric machines on site, recharging from HVO powered generators.

Thanks to the increase in demand for low emission machines, the fleet of electric vehicles is growing in the UK and many companies are now turning to these machines to offer a cheaper alternative to gas powered machines.

New generations of electric machines have extended battery lives, making them an increasingly popular and “clean” choice.

Fortunately, although a lot of machines may not be guaranteed for use with HVO, many generators are compatible.

The way ahead would seem to be the use of an electric fleet to be recharged on-site from HVO powered generators.

Some companies in the plant and access hire industry have already started adapting to this reality. Mainline Hire stocks a range of hybrid and electric scissor lifts, boom lifts and forklifts rated for outdoor use.  With many more to follow in 2022.

Mainline’s fleet also includes a range of generators and bunded fuel bowsers to cover all on-site power generation needs, with inventory covering distribution boards, cabling, lighting and every other aspect of an energy self-sufficient site.

Stock includes some of the most up to date and demanded machines in the industry. Mainline’s team of time-served account managers are experienced in the complexities of high-level access projects off all sizes and, alongside a team of CAP trained engineers; they can find solutions to the most logistically challenging projects.

If you are looking for industry experts for plant and access hire throughout the UK, get in touch with Mainline today and put your project in the best hands.

1 ’UK fuel prices’, Yahoo Finance, 3rd November 2021:
 https://uk.finance.yahoo.com/news/diesel-price-at-new-all-time-high-112007718.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAEJeB0JLjSvoW0MoKToN782dLxSmcxiH4ROGMe7DbmbCWoaj-ZabWSj0yk6eBg-wlj4RBSYGr4r2J0AH7sWEciN5xdS1tTPkM_0O498umvz_Hgg_B0C1ysc983zw0DJzazoJwpmsrsMPrbNCW23RpalZzqCUaLeJzTzWvIfJ0V3I

2 The reform of red diesel and other rebated fuels entitlement, UK Government website, 16th November 2021, https://www.gov.uk/government/publications/reform-of-red-diesel-entitlements/reform-of-red-diesel-and-other-rebated-fuels-entitlement

3 ’The Lowdown on Red diesel rule changes’, The Construction Index, 4th October 2021: https://www.theconstructionindex.co.uk/news/view/the-lowdown-on-red-diesel-rule-changes

4 ‘Evaluation of a Hydrotreated Vegetable Oil (HVO) and Effects on Emissions of a Passenger Car Diesel Engine ‘,Dimitriadis Athanasios et al., Frontiers in Mechanical Engineering, Volume 4, 2018, Pages 4, ISN 2297-3079, https://www.frontiersin.org/articles/10.3389/fmech.2018.00007/full

 

References:

‘HVO fuel, what you need to know’, Farmers Weekly, 2nd August 2021: https://www.fwi.co.uk/machinery/hvo-fuel-what-you-need-to-know

‘Biodiesel Blends’, U.S. Department of Energy Data Centre: https://afdc.energy.gov/fuels/biodiesel_blends.html

‘Market opportunities to decarbonise heavy duty vehicles using high blend renewable fuels’, Zemo Partnership, 4th March 2021: https://www.zemo.org.uk/work-with-us/fuels/projects/2020-high-blend-biofuels.htm 

‘Impact of HVO blends on modern diesel passenger cars emissions during real world operation’, Ricardo Suarez-Bertoa et al, Fuel, Volume 235, 2019, Pages 1427-1435, ISSN 0016-2361: https://www.sciencedirect.com/science/article/pii/S0016236118313929