As part of plans put in place before the COVID-19 pandemic to reduce net carbon and move to more sustainable biofuels, the UK government set a cut-off date for the use of red diesel in the construction industry, amongst other sectors, from 1 April 2022. Since reporting on the issue in February, we’ve received a phenomenal response from our members, and it’s clear this is a key issue for many SME builders.
In response to this, we issued a joint letter with a Coalition of Construction Industry Leaders to the Chancellor, the Rt Hon Rishi Sunak MP, calling on the Government to postpone the removal of the rebate by 12 months to help construction businesses.
We warned the Chancellor that more time is needed. Rising global fuel prices compounded by the war in Ukraine will put even greater pressure on smaller construction companies, which are already facing significant price hikes for materials and labour. These unprecedented circumstances could not have been foreseen when the Government report recommending the rebate was published in February 2019.
Although we support the transition to green alternatives for construction plant machinery and vehicles, we are concerned that progress in their development and use has been slowed by the pandemic. This means construction businesses are unprepared for the removal of the red diesel rebate. In addition, the Government’s intention to scrap the rebate for biofuels at the same time seems at odds with the aim of making construction greener.
Brian Berry, Chief Executive of the FMB said: “Unprecedented global events, not least the consequences of the Russian invasion of Ukraine, make this the worst time to pile yet more financial pressure on small builders with the ending of the red diesel rebate. The FMB fully supports the shift to greener alternatives to diesel for use by the construction sector, but progress towards these has been too slow and ending the rebate now risks the viability of local, community-based builders already hit by 18 months of spiraling product prices.”
Through our retrofit and energy efficiency campaign, we are calling for a national retrofit strategy that tackles the emissions from our homes and helps to support the Government’s target of net zero emissions by 2050. The national retrofit strategy sets out a plan to upgrade the UK’s existing housing stock, while also highlighting the training and investment needed in building a strong market for energy efficiency improvements.
Related content
