Survey suggests main impact of red diesel rebate change is increased cost

A recent survey suggests that the red diesel rebate changes have increased costs and fuel theft but done little to encourage the switch to low carbon alternatives.

A recent survey suggests that the red diesel rebate changes have increased costs and fuel theft but done little to encourage the switch to low carbon alternatives.

Since April 1st, 2022, the entitlement to use rebated red diesel has been removed for many sectors previously included. The aim was to help reduce harmful greenhouse gases and encourage businesses to adopt low-carbon red diesel alternatives, such as EV technology.

However, a recent survey has found that many businesses have simply switched to white diesel, which is more expensive to purchase and just as harmful to the environment and have no plans to switch to EV.

The survey, by leading business fuel card supplier, Right Fuel Card, questioned customers from a range of industries on several fuel-related topics with some strong responses.

Asked if the change in red diesel entitlement would encourage the affected sectors to use more electric vehicles, most respondents claimed that the sole effect of these changes has been to increase fuel costs, with only 29% believing it will help with EV adoption.

The agriculture and farming industry also expressed concerns about the resultant increase in damage and theft since the change.

Barriers to EV still too high

With the sale of new petrol and diesel cars set to be banned after 2030, there is a lot of buzz around the switch to green alternative fuels such as electric and hydrogen.  Whilst many large businesses have started to switch their fleet to electric, the survey found that others regard the barriers are still too high.

The survey revealed a wide mix in confidence for the next 12 months depending on the industry, with transport-related businesses including haulage and courier firms much less positive than construction and engineering.

All industries seem to agree, however, that moving to EV was not part of their plans with an overwhelming 98% of respondents stating that they had no intention to move to EV in the next 12 months.

The survey, which brought responses from right across Right Fuel Card’s SME customer base, showed that, across all industries, cost is still regarded as the highest barrier to switching. Other barriers are more nuanced depending on the industry’s needs.

Lack of infrastructure

Transport firms highlighted an almost complete lack of infrastructure for larger vehicles, whilst couriers and even taxi firms, pointed out that the time to charge was too slow, leaving them with expensive, unproductive time.

Unsurprisingly, the key barrier to those in the agricultural sector or based in rural locations was infrastructure.  Investment has been predominantly focused on large cities, towns, and busy motorway routes, leaving rural businesses unconnected.

David James, sales director at Right Fuel Card commented: “The results were unexpected given the drive to move to alternative fuels, but given the current cost of living crisis, businesses have become even more cost sensitive.  We want to support our customers’ switch to alternative fuels, and we have an ever-increasing product range to meet the changing needs of our customers.

“We’re looking forward to being able to offer a wide range of cards which would reflect the wider range of fuels that vehicles will be using in the years ahead.”