As reported earlier this year on Afloat.ie, the ban on the use of red diesel to propel private pleasure craft in Northern Ireland has come into effect.

As of 1 October 2021, following an extension from this past summer, private pleasure craft in Northern Ireland must use diesel, biodiesel or bioblend on which duty has been paid at the full (unrebated) rate in the motor used for propulsion.

Vessels with one fuel tank (for both propulsion and non-propulsion) cannot use red diesel unless it was put into the fuel tank either in:

• Northern Ireland before 1 October 2021; or
• a jurisdiction where using red diesel for propulsion of private pleasure craft is legal post-Brexit, such as Great Britain, the Channel Islands and the Isle of Man.

Boaters who travel to Northern Ireland having refuelled with red diesel elsewhere are advised to keep documents (such as receipts, logbooks and declarations) to show HMRC where and when the vessel was refuelled.

Private pleasure craft in Northern Ireland (including houseboats) with separate tanks for propulsion and non-propulsion uses may continue to use red diesel in the non-propulsion fuel tank — but the supplier cannot allow any discount on the ‘white’ diesel because it is all being used for propulsion.

In addition, any residential craft with a single tank supplying an engine which does not propel the vessel may continue to use rebated (red) diesel.

Fuel suppliers in Northern Ireland who sell white diesel for private pleasure craft with a single fuel tank can register for a new HMRC relief which allows to deduct at point of sale an amount equal to the duty rebate on 40% of the total volume of white diesel supplied.

More can be found in Excise Notice 554 (Fuel used in private pleasure craft and for private pleasure flying) on the Gov.uk website HERE.

HMRC has issued Excise Notice 554 which contains details about fuel used in private pleasure craft.

For Northern Ireland (NI), private pleasure craft users will no longer be able to use red diesel to propel their craft, but the deadline date for this has been extended to October 1.

As Afloat reported last month, this gives more time for private pleasure craft to use up red diesel in NI and their fuel suppliers to implement the change from red to white diesel.

There will be a new relief scheme on non-propulsion fuel for heating and power generation – see paragraph 2.3 of the Notice.

The Cruising Association's Regulations and Technical Services group (RATS), has pointed out that pleasure craft from NI may travel to Great Britain and fill up with red diesel. RATS advice is to keep up-to-date all receipts, logbooks and engine hours, to show HMRC where and when you refuelled.

For England, Scotland and Wales, the current red diesel position stays the same. Diesel used for propulsion is taxed at the full duty rate, as for road diesel. Red diesel to be used for heating, lighting and power generation may be purchased at the rebated rate. RATS has suggested that purchasers should be able to give the exact percentage to be used for propulsion and heating and not necessarily the suggested HMRC 40/60 split.

The full details on the procedures and purchase of marked gas oil (red diesel), including the rare situation of a vessel having a separate tank for heating, are in Chapter 4 of Notice 554. HMRC has been contacted for clarification on certain points and RATS awaits its reply. Further guidance is due in July.

Full details of the fuel regulations can be read here

The British Government has announced a three-month delay in the implementation of the red diesel ban for private pleasure craft in Northern Ireland.

The move follows lobbying by Bangor Marina and others in the NI leisure boating industry who emphasised the dearth of white diesel options in the region.

Originally set to come into effect on 30 June, the red diesel ban is intended to meet the UK’s obligations under the Northern Ireland Protocol and bring the region in line with the 2018 judgment by the Court of Justice of the European Union.

This is the same ruling which prompted the Republic of Ireland’s ban on green-dyed diesel for leisure craft propulsion last year.

In March, British Chancellor Rishi Sunak announced in his first post-Brexit Budget that boaters in England, Scotland and Wales would continue to use red-dyed diesel for pleasure boating without penalty in domestic waters — leaving NI boaters in limbo.

Bangor Marina says it met earlier this year with officials from HM Revenue & Customs, HM Treasury and RYANI “to discuss the difficulties we would face if we had to switch to white diesel in June.

“During that meeting, we did put forward a compelling proposal that the switch to white diesel should take place after the summer holidays.

“Today [Friday 21 May] we have been advised by HM Revenue & Customs that the UK government has decided to delay the implementation of the prohibition on red diesel used for propulsion of private pleasure boats in NI until 1 October 2021.

“More detailed guidance is expected to be produced in July.”

The decision will come as a relief for cruisers and leisure boaters across Northern Ireland as it emerges from lockdown into the summer boating season.

But with freedom of movement on the cross-border Shannon-Erne Waterway, the extension poses a “customs headache” for Irish authorities, a source close to Afloat.ie suggests.

And if the delay is any indication of a proclivity to continue moving the deadline back, the situation would deal a heavy blow to Irish suppliers, particularly in border areas — while also encouraging boats “to spend more time in NI and less [in the Republic]”, the source added.

The Royal Yachting Association of Northern Ireland (RYA Northern Ireland), together with British Marine and the Cruising Association, met yesterday with representatives from HM Revenue and Customs and HM Treasury to discuss the difficulties for private pleasure craft in Northern Ireland resulting from the decision to withdraw the use of red diesel.

Recreational boaters and the marine industry urgently need clarity surrounding the Government's plans for implementation and how it intends to address the practical difficulties before June.

As Afloat reported earlier, the Cruising Association has said no white diesel supply exists in Northern Ireland leaving boaters without options later this summer

The discussions took place against the background of the Protocol on Ireland/Northern Ireland and in particular Article 8 concerning Union VAT and excise law that applies to Northern Ireland.

To achieve consistency with the 2018 judgment by the Court of Justice of the European Union and to ensure that the UK meets its international obligations under the Protocol, private pleasure craft users in Northern Ireland will no longer be able to use red diesel for propelling their craft.

It is proposed that this change will take effect by June this year. The RYA has stressed the difficulties presented by this short timescale and requested a longer period to address the white diesel supply issues that the decision presents. Once implemented, private pleasure craft users in Northern Ireland will have to use white diesel for propulsion instead of red diesel.

Private pleasure craft users in Northern Ireland with only one fuel tank on board for propulsion and non-propulsion will not have to pay a higher rate of duty on their non-propulsion use of diesel than they would otherwise have to pay. The Government are intending to introduce a new relief scheme in Northern Ireland which will become effective from the date that users become obliged to use white diesel.

The RYA is concerned that the volume of sales of diesel to private pleasure craft is not great enough for suppliers to justify the expense of providing a second pump at the waterside, which is going to cause significant supply problems.

HMRC have confirmed that once the change does take effect, it would be illegal to buy red diesel for private pleasure craft propulsion in Northern Ireland, but fuel already present in tanks could be used without penalty. Private pleasure craft from Northern Ireland that fill up in Great Britain (GB) in future could do so under the Istanbul Convention which will allow red diesel legitimately purchased in GB to be taken back to Northern Ireland in the main fuel tanks of a boat.

The RYA recommends that recreational boaters with marked 'red' diesel purchased in GB:

• Keep receipts for diesel purchased in GB, to prove that it was bought in the GB, and request that your retailer marks them "duty paid."
• Log the date of refuelling and engine hours to reinforce these records; and
• Do not carry marked diesel anywhere other than in their craft's main fuel storage tanks.

Chief Operating Officer of RYA Northern Ireland, Richard Honeyford, commented: "RYA Northern Ireland welcomes that there will be a new duty relief scheme in place to help avoid disproportionately penalising Northern Ireland boaters and details of this scheme are to follow.

"We also welcome a number of clarifications from HMRC and look forward to continuing to work closely with RYA, HM Treasury and HMRC to ensure that boaters in Northern Ireland are clear on all guidance. RYA Northern Ireland will continue to update its members as and when further information is available."

Howard Pridding, RYA Director of External Affairs, commented: "The meeting with Government was productive and both sides now have a clear idea of the issues ahead. We will continue to work with our colleagues in RYA Northern Ireland to talk to Government about the practical difficulties that these issues present and work constructively with HM Treasury and HMRC officials to develop guidance that will inform boaters about the new fuel situation in Northern Ireland."

Hundreds of recreational boat owners in Northern Ireland could be affected by an HM Treasury decision outlining that from June they will be required to use white diesel instead of red.

As part of the Spring Budget announcement, the UK Government stated that it is not changing the treatment of private pleasure craft in Great Britain. They will continue to be able to use red diesel and pay their fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion they intend to use for propulsion.

However, in Northern Ireland, recreational boaters will no longer be able to use red diesel for propelling their craft and will need to use white diesel from June onwards.

The government response to the consultation outlines: "In Northern Ireland, private pleasure craft users will no longer be able to use red diesel for propelling their craft. This will achieve consistency with the 2018 judgment by the Court of Justice of the European Union (CJEU) and ensure the UK meets its international obligations under the Northern Ireland Protocol of the Withdrawal Agreement.

"It will also align with fuel used by private pleasure craft in the Republic of Ireland, which should make it simpler for private pleasure craft users to access the fuel they need if they sail between Northern Ireland and the Republic of Ireland (and vice versa)."

The RYA Northern Ireland, which is the governing body for sailing, windsurfing and powerboating in Northern Ireland, is seeking clarity on the changes for Northern Ireland.

Richard Honeyford, Chief Operating Office for RYA Northern Ireland, explains: "While the rationale to keep private pleasure craft in line with commercial entitlements has been taken in Great Britain, the same rationale does not appear to have been applied in Northern Ireland.

Richard Honeyford, CEO of RYANI -"Many boat owners cruise to Great Britain, where only red diesel will be available. We will also need clarity around how this may be considered on returning to Northern Ireland"

"This will provide a number of immediate challenges across both inland and coastal waterways, where there is little or no waterside infrastructure currently in place in order to supply white diesel to recreational craft. At the moment, there are pumps for red diesel and to change this will take time and expense in order to develop adequate and accessible supply across all bodies of water and within the given timeframes."

He adds: "RYA Northern Ireland is also asking for clarification on how the new rules may be regulated. We welcome some indications on how HMRC would view the 'run off' of red diesel in tanks. With current lockdown restrictions, many boat owners have filled their tanks with red diesel, for example, to avoid condensation, and this needs to be considered to avoid boat owners becoming inadvertently caught out by these changes.

"Many boat owners cruise to Great Britain, where only red diesel will be available. We will also need clarity around how this may be considered on returning to Northern Ireland."

Honeyford says: "We welcome that there will be a new relief scheme in place to help avoid disproportionately penalising NI boaters, however, we await details of this scheme.

"Our current advice to boat owners is to retain all receipts, including VAT, in relation to the purchase of red diesel up to any changeover date, and then any subsequent receipts proving the purchase of white diesel."

RYA and RYA Northern Ireland have requested a meeting with HMRC to outline these concerns and seek further clarification.

Northern Ireland recreational boaters will no longer be able to use red diesel for propelling their craft.

This is despite the British Chancellor Rishi Sunak announcing on Wednesday, as Afloat reported here, that UK sailors will still be able to use red diesel to propel their vessels.

The reason behind the NI omission of course is to ensure the UK meets its international obligations under the Northern Ireland Protocol of the Withdrawal Agreement following Brexit.

Last year, the UK Government announced it would remove the subsidy on red diesel from April 2022, although boaters would still be able to use subsidised fuel for heating onboard.

As regular Afloat readers will recall, it followed a consultation with the sailing industry and commercial boat owners after a ruling by the Court of Justice of the European Union (CJEU) in October 2018 that the UK wasn't complying with the EU Fuel Directive by allowing leisure vessels to use marked diesel.

Green Diesel Ban

A similar ruling was made against Ireland, which had green diesel. From 1 January 2020, the use of green diesel to solely power pleasure boats was banned.

The U-turn by the Government only applies to recreational boaters in Scotland, Wales and England.

Use of red diesel will be maintained for all commercial boat operators and for private pleasure craft users in Great Britain following the UK's Spring Budget 2021 announcement.

Lesley Robinson, CEO of British Marine called it a 'Red-letter day' for the marine industry.  “After months of extensive consultation and discussion with HM Revenue and Customs (HMRC), I am delighted that the Chancellor has today announced that the entitlement to use red diesel will be maintained for all commercial boat operators and for private pleasure craft users in Great Britain.

In a statement, British Marine said: “This is a big success story for the leisure marine industry and British Marine as the treatment of red diesel beyond April 2022 has been a key issue for our members. I am particularly grateful to colleagues at HMRC for working closely with British Marine, listening to industry feedback and giving the leisure marine sector the certainty needed at this unprecedented time.

Lesley Robinson, CEO of British Marine

“Today’s announcement has also brought further relief with the Chancellor repeating his pledge to do ‘whatever it takes’ to help businesses impacted by COVID-19. The decision to extend the furlough scheme until the end of September is very welcome and will help to prevent further job losses across the sector, particularly as our members prepare for the start of the next boating season.

“We particularly welcome the introduction of further grants for businesses impacted by the restrictions put in place to control COVID-19. The extension of the business rates holiday for the retail, leisure and hospitality sectors until the end of June, combined with the announcement that the 5% rate of VAT will remain in place for the hospitality sector until the end of September, will be of huge benefit to our hire boat operators and accommodation providers. The announcement of further loans of up to £10 million in value is another timely lifeline which will support businesses of all sizes with more immediate cash-flow concerns.

“Today’s Budget will play a key role in supporting the roadmap out of lockdown and gives businesses in the sector more confidence as they look to restart ahead of what is anticipated to be another busy ‘staycation’ summer in the UK.”

Marine red diesel is still on sale to leisure vessels in the UK despite Westminster’s pre-Brexit plans to phase it out, the Cruising Association says.

As previously reported on Afloat.ie, the British Government made clear its intention to legislate for a ban on the use of subsidised dyed or ‘red’ diesel except for agriculture, railway and non-commercial heating.

It follows a judgment from the European Court of Justice that also necessitated Ireland’s own ban on green-dyed diesel use for cruising and leisure boating which came into force at the start of 2020.

Now that Britain has left the EU, red diesel will continue to be legal for the propulsion of vessels in the UK until April 2022, says the body that represents Britain’s small-boat cruising community.

However, red diesel in craft engine tanks is not permitted in the EU27 and other countries — including Ireland.

The CA’s Regulations and Technical Services group (RATS) says it has received information from HM Revenue and Customs that they agree the Istanbul Convention of 1990 allows vessels to make visits to the EU27 and elsewhere without import prohibitions or restrictions on propulsion fuel.

This includes visiting craft with UK red marine diesel — or red dye traces — in their engine tanks, it adds. But it is unclear whether EU27 countries will implement their own laws in accordance with the Convention as expected.

The situation is also different in Northern Ireland, where the Northern Ireland Protocol means relevant EU directives will continue to apply.

“If this affects what fuel private pleasure craft (PPC) in Northern Ireland can use, HMRC will provide an update at the appropriate time,” the CA says.

The British Government has launched its long-anticipated consultation with red diesel users across the UK, including Northern Ireland, following the news of plans to restrict the fuel’s usage from 2022.

This past April the UK’s Cruising Association confirmed Westminster’s intention to legislate for a ban on the use of subsidised dyed or ‘red’ diesel except for agriculture, railway and non-commercial heating.

The move is being touted as a way to tackle climate change by giving businesses an incentive to improve their energy efficiency.

But it would also bring the UK into line with EU regulations, as has Ireland’s own ban on green diesel use for cruising and leisure boating which came into force at the start of this year.

The HMRC consultation, which is open until Thursday 1 October, will seek the input of recreational boaters, among others, to determine whether they and other sectors should be allowed to maintain use of red diesel beyond April 2022.

The UK’s Royal Yachting Association (RYA) insists that it backs efforts to increase energy efficiency in the short-term and to strive towards a zero-carbon future.

However, it also makes the case for retaining red diesel based on “existing supply needs, not colour, tax status or price”.

The RYA says: “Recreational boaters already pay the full rate of duty and VAT when purchasing fuel for the purposes of propulsion.

“We will therefore be looking at the proposals to reform the tax treatment of red diesel closely to see how this might affect the supply of fuel for recreational use for both propulsion and how it will impact supply for domestic usage such as heating.

“It is a fact that the further west and north you travel in the UK, the more likely it is that you will have to rely on waterside outlets that only supply red diesel for commercial purposes, such as to fishing fleets.

“In many places, some remote, the limited quantities of fuel used by recreational craft do not warrant the cost of installing additional equipment to supply white diesel for the recreational boating sector.

“If the Government removes the entitlement to use red diesel from most sectors from April 2022 and white diesel is then made as widely available as red diesel is now, then supply of fuel will not be affected.

“The RYA will be responding to this call for evidence and urges any members with an interest in red diesel to participate in the consultation.”

The UK’s Cruising Association (CA) says it has confirmed with HM Revenue & Customs that it is their intention to legislate that dyed or ‘red’ diesel can only be used for agriculture, railways and non-commercial heating from April 2022.

This move would be in line with EU regulations and follows Ireland’s own ban on green diesel use for leisure boating that came into force at the start of this year.

The CA’s Regulations and Technical Services group (RATS) also confirms that the duty on standard white diesel for boats will be the same as the full rate paid on white road diesel in the UK.

This means that the present so called '60/40' fuel duty split will disappear — but commercial vessels, such as fishing boats, will still be able to claim a rebate on the full rate through their Marine Voyages Relief scheme.

But the HMRC says it is exploring the possibility of introducing a scheme that allows private pleasure craft to pay only the current lower rate for red diesel non-propulsion uses.

The CA says it “welcomes the clarification on the use of white diesel which should make it more conveniently available throughout the United Kingdom from marinas and ports as they will have to supply all marine vessels with one colour of diesel”.

The “bonus” of such a situation would be that boaters fulfil the SOLAS V regulations for sea voyages and “no longer have the concern of the presence of red diesel in their tanks when visiting EU maritime states”.

A public consultation will deal all issues involved in the proposed legislative change but there is no timetable for this amid the current Covid-19 pandemic.

A spokesperson for the CA’s RATS group says private pleasure craft from the UK should continue to legally use red diesel as they currently do, since it is still the only easily available diesel fuel at home marinas. The CA’s current advice on using dyed diesel wen visiting the EU is available HERE.