We now speak with Stephen Hannan, sales director at Merridale, a leading supplier and service provider to the fleet industry.
Stephen talks us through the options available to fleet operators who need to convert existing storage facilities.
As we have previously highlighted, fleet operators should be aware that the government has legislated that, from 1st April 2022, gasoil, otherwise known as red or rebated diesel, will no longer be permissible for many types of vehicles and plant machinery in the UK.
Having been approached by members of the fleet operating community for guidance on responsibilities and actions, Stephen spoke with Margaret Major, managing editor of Fuel Oil News, to share some important insight with our community in the article below.
Where the responsibility lies
It is the responsibility of all fleet operators who currently use red diesel to determine whether the new legislation applies to them or otherwise.
As a leading supplier and service provider to the fleet industry, quite a significant number of companies have approached Merridale for guidance. From our perspective, where changes do apply, fleet operators appear to be faced with three main choices. These are:
- To close or ‘mothball’ the existing red diesel storage facility and utilise any existing white diesel facility.
- To modify the existing red diesel storage facility to store white diesel and use it as a stand-alone facility.
- To modify the existing red diesel storage facility and to interconnect the storage tank formally used for red diesel with the existing white diesel storage tank.
Each of these options will cost fleet operators, to some degree, and it is anticipated that this will place significant demand upon the pump & tank industry. It is important to note that it has been indicated that government is not prepared to create amnesty periods and that all conversions MUST be completed by 1st April 2022.
Option 1: To ‘close’ or ‘mothball’ the existing red diesel storage facility and utilise any existing white diesel facility.
It is almost certain that the Environmental Agency will not be prepared to let you simply cease usage and leave in situ and, since diesel was reclassified as flammable, any quantity of unused diesel that you store will probably be of interest to DSEAR and your insurance companies.
Unless you have a significant quantity of red diesel still stored, it would probably be of no interest to your fuel supplier for them to purchase this from you due to the reprocessing that this would require. We would, however, still suggest you approach them to see if they do provide this option.
The likely outcome is that you will need to employ specialists to clean the tank, dispose of all remaining product, and uproot the storage tank for authorised disposal.
Where such tanks are in very good order, there may be a market to sell these to refurbishers.
Option 2: To modify the existing red diesel storage facility to store white diesel and use it as a stand-alone facility.
So far, this is the option that most companies have indicated is top of their considerations. However, fleet operators would be expected to employ a specialist contractor to remove residues, clean out the tank, and flush with fresh product, as suggested by the following government report:
‘Registered fuel suppliers that switch a fuel tank from red to white diesel will need to flush out the tank and supply lines until no trace of marked rebated fuel remains.’ This will help to ensure compliance and minimise the risk that white diesel that has had the full duty rate paid on it is contaminated with the red diesel marker.’
The action does not finish here. Unless the tank is to be used for the same fuelling purposes as previously, the fleet operator may also need the services of a specialist equipment contractor, such as Merridale, to reprogram existing fuel and tank management systems, as well as any driver and vehicle identifiers. We would also recommend that all line, pump, and nozzle filters are cleaned or replaced, and appropriate labels and descriptors are fitted.
Option 3: To modify the existing red diesel storage facility and to interconnect the storage tank formally used for red diesel with the existing white diesel storage tank.
Many fleet operators may wish to interconnect the former red diesel tank with the existing white diesel tank so that their overall storage capacity is not compromised.
To do this, the fleet operator will firstly need a specialist to carry out everything detailed above, to modify the use from red to white diesel.
Additionally, there would need to be a specialist pump and tank pipework company to interconnect the outlet lines from both tanks, including the fitting of appropriate non-return valves. This can be a simple matter though, where the existing facility consists of multi-compartment storage tanks or two tanks very close together, so pipework can be interconnected easily.
As a leading supplier and service provider to the fleet industry, quite a significant number of companies have approached Merridale for guidance on conversion. You can find out more here: fuelmanagement.co.uk/category/fleetoperators/
As the deadline rapidly approaches, we will continue to communicate updates and insights on all aspects of the red diesel rebate change. If you have questions for the community or wish to contribute insights and updates, please contact firstname.lastname@example.org