The UK government has decided to keep red diesel taxation at its current levels. Moreover, it decided not to remove the red diesel status for ancillary equipment. According to the freight and logistics interest group FTA, this was the right choice for the environment as well as the logistics industry.

Following an almost year-long consultation, FTA is pleased the government has chosen to refrain from increasing tax on both rail and ancillary equipment. Christopher Snelling, Head of UK Policy at FTA commented: “Rail freight brings many benefits and its use should be incentivised, not discouraged by punitive taxation.”

Business confidence

“Every freight train takes about 60 HGVs off the country’s roads, which helps to reduce carbon emissions, air pollution and congestion while boosting road safety. Now the lingering threat of a tax increase has been quashed, businesses within the logistics industry have the certainty and reassurance they need to increase investment in this transport mode and consider long term switching across to rail”, he added.

“Regarding red diesel status for ancillary equipment, FTA explained that many stakeholders held the mistaken belief that newer, cleaner equipment must use less fuel, so increasing taxation would encourage people to switch more quickly.  However, cleaner equipment is not more fuel efficient; often the opposite is true, the business groups said. “Increasing taxes would, therefore, only discourage businesses from switching to more environmentally-friendly equipment. FTA wants to see the government do more to encourage this uptake: we need improved standards for new equipment, so it can populate the market more quickly, and, as with HGVs, deliver massively reduced emissions over the next years”, Snelling said.