What’s New for The Energy and Environment Sector?
As an assessor working with businesses and other organizations of all sizes and sectors across the UK, I am finding that some of the recent developments and announcements in this area are bypassing many of those responsible for managing these issues.
I thought that I would, in this article cover two of the recent announcements that will have an impact on many businesses and try to give some context to the decisions made.
Many of the businesses I work with currently use Red diesel - I’m finding many businesses that have not caught up with the fact that in the 2020 Budget, the Government announced that it was removing entitlement to use Red diesel from most sectors, except for agriculture (including horticulture, forestry and fish farming), rail and non-commercial heating.
There was a fairly wide consultation process that took place in Summer 2020, the result of which did not significantly amend the original proposals. It did however, add some other specific users to continue using Red diesel which are:
Fishing and water freight
Travelling funfairs and circuses
Amateur sports clubs
Non-commercial power generation
Currently Red diesel is taxed much lower than the normal ‘white’ diesel or ‘DERV’ that is used in road going vehicles and has a Tax of Fuel Duty of 57.9p per litre imposed on it. Currently Red diesel is taxed at 11p per litre.
This means that the entitlement to use Red diesel has been removed from all except the above exemptions from 1st April 2022. The move is to encourage users to switch to more sustainable fuels; the more expensive diesel is, the greater the motivation to improve energy efficiency and opt for cleaner alternatives.
There are some challenges in this - not just the significant cost implications. The sectors that are projected to lose their Red diesel entitlement can switch to white diesel, but the dye used in Red diesel is designed to remain in fuel tanks and pipework. This could potentially cause the authorities to assume that anyone who has legally purchased white diesel has illegally used Red diesel in the past.
The government doesn’t require Red diesel users to flush out tanks in their vehicles/machinery due to the high cost incurred. This is also to avoid environmental damage from leaks and unsafe disposal of Red diesel.
Fuel suppliers are however, being asked to replace fuel tanks or flush out tanks and pumps ahead of the Red diesel tax changes to ensure no trace of Red diesel remains when supplying white diesel.
Fuel suppliers will have to police the use of Red diesel going forward and ensure that all fuel supplied to a sector losing entitlement burns all low tax diesel before this date.
You may, or may not have heard about the forthcoming light bulb ban. So, what is it?
LED light bulbs now account for around two-thirds of all lightbulbs sold in the UK and in an effort to further increase their use, the sale of halogen lightbulbs will be banned in the UK from September 2021 and in September 2023, the sale of most fluorescent tubes will be banned.
This was announced by the UK Government on the 9th June 2021 and is likely to hit many if not all businesses, organizations and households.
So what exactly will be banned?
The sale and supply of all halogen bulbs with the exception of R7s - used in security and other high poweRed lights (shown below) will be banned from September 2021.
In September 2023, the sale and supply of high-energy fluorescent lightbulbs will also be banned. It is not clear at this time whether this will include compact fluorescent bulbs, but T5 tubes (the smallest diameter at (⅝” or 16mm) are likely to remain.
Whilst the phase-out date of 2023 is still some time off, all organizations need to be thinking about the cost and ramifications of this now. Many organizations that I visit have hundreds if not thousands of fluorescent tubes in use.
To help people to choose the most efficient lightbulbs, changes to the energy labels that consumers see on bulb packaging are being brought in, with the A+, A++ and A+++ ratings abandoned and efficiency graded between A-G, with only the most efficient bulbs given an A rating.
This is but a small part of the overall Government strategy to now meet the UK’s sixth Carbon Budget with a new target in law to slash emissions by 78% by 2035 and will now also incorporate the UK’s share of international aviation and shipping emissions for the first time. This will bring the UK more than three-quarters of the way to net zero by 2050.