MPANI calls for rethink on removal of red diesel rebate

Mineral Products Association NI seeking delay to planned removal of red diesel rebate

AHEAD of the Spring Statement on 23 March, the Mineral Products Association NI (MPANI) is appealing to local MPs to make urgent representations to the Chancellor to urge him to delay the planned removal of the red diesel rebate on 1 April, given the current unprecedented rises in energy and fuel costs and the greater risk of theft from remote quarries and construction sites.

MPANI regional director Gordon Best said: ‘In Northern Ireland and across the UK, our members have been facing significant challenges as they supply essential materials to the construction industry and other sectors. Our members produce millions of tonnes of minerals and mineral products each year, the largest material flow in the economy, and supply construction, manufacturing, energy, water, transport, pharmaceuticals and leisure.

‘We already incur hundreds of millions of pounds of taxes, levies, and fees, including the aggregates levy, landfill tax, carbon and energy measures, and a huge array of other regulatory measures which create additional fees and charges.’

Mr Best added: ‘Energy costs have been a serious challenge for some months but with the Russian invasion of Ukraine have seen a massive increase with no sign of them coming down in the months ahead.

‘While we recognize that there is little the UK Government can do about global commodity prices and the war in Ukraine, government can and must take action to alleviate the pressure on our members, the wider construction sector, and those manufacturers impacted by the removal of the red diesel rebate.

‘The specific circumstances of the border mean that the removal of the red diesel rebate will see mineral operators’ costs in Northern Ireland rising significantly in comparison with their competitors south of the border.

‘We believe the removal of the red diesel rebate, due to take place on 1 April 2022, is premature and must be reversed. In short, it is a cash grab dressed up as an environmental measure. The policy is flawed and does not encourage a move to zero-carbon fuels, as firms will simply switch to standard white diesel, with exactly the same carbon content.

‘This is combined with the fact that greener options for the heavy plant and machinery that our minerals and construction industries use is not yet available at scale in the UK or in Europe. We also fear the new law will bring with it increased security risks for firms who will be storing substantial amounts of white diesel on site for daily use and, with increased risk of theft, will increase costs to local police forces and environment agencies.

‘We are appealing to our local MPs to make urgent representations to the Treasury to have the removal of the rebate delayed at the Spring Statement.’