The duty rate of HVO depends on the fuel it is replacing and whether the setting is exempt. For example, if HVO is replacing red diesel in a commercial setting that will no longer be able to use red diesel after 1st April 2022, the duty rate will be 57.95ppl i.e. the same as the white diesel alternative. If HVO is being used to replace red diesel in a setting that is allowed to use red diesel after 1st April 2022, then the duty will be at the same rate as red diesel i.e. 11.14ppl. Please make reference to the UKIFDA advice on the red diesel changes. Therefore, the use of HVO to mitigate the impact of the red diesel changes is unlikely to result in being able to circumvent the duty increase.
The purpose of the RTFO and the ability to reclaim RTFCs is to increase sustainable renewable fuel usage in transport and thereby reduce greenhouse gas emissions.
The rules are highly complex and, in some areas, highly unclear. On this note, UKIFDA has tried to give some broad rules of thumbs – but like most rules, there are of course exceptions. If members are in any doubt, they should contact UKIFDA or the Department for Transport before tendering with customers. The first very basic rule of thumb is if the machine or application has wheels it could be eligible for RTFCs – so for example heating of any sort should not benefit.
Non-road mobile machinery, (NRMM) (including inland waterway vessels which do not normally operate at sea), tractors, and recreational craft that do not normally operate at sea can be eligible for RTFCs.
The following rules of thumb should be noted:
The purpose of the RTFO is not to support electricity generation but to increase sustainable renewable fuel usage in transport ·
Stationery machinery is specifically excluded from NRMM
An example of an RTFC-eligible generator would be a set of
temporary traffic lights at roadworks, whereas an example of a non-RTFC
application would be a permanently housed generator producing electricity.