Clean Air Strategy may cost more for food distributors
Red diesel is on the Government’s list of targets for banning. If this is indeed the case, according to Food Storage and Distribution Federation (FSDF), banning the use of red diesel for refrigeration units would cost food distributors £100million at least, which inevitably would be passed on to the consumer.
Shane Brennan, chief executive of the FSDF, wrote to Michael Gove, Environment Secretary, making clear that numbers of diesel-powered fridge units are used on vehicles on UK roads and their contribution to air pollution. The difference in tax for red diesel is 11.14p per litre, compared to the standard rate of 57.95p per litre. So the banning of red diesel in effect would mean a tax increase amounting to 20% for operators.
Prices would rise
“We are fully committed to our responsibilities to find ways to reduce emissions and to playing our part in meeting the ambitions of the Clean Air Strategy. We understand why Government is considering removing the red diesel rebate for equipment like refrigerated units on delivery vehicles, but we urge Ministers not to do it.
This policy would not achieve the stated ambition, which is to encourage businesses to switch to new ‘cleaner’ technologies. On the contrary, removing the red diesel rebate would impose unavoidable direct costs on the industry. This would not only prevent food distributors from being able to invest adequately in innovation, or even upgrade their equipment, but it would also drive up food prices on the shelves.”