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Red Diesel - UK Only

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Not a great outcome all round, seems Red will only be legal in UK waters.


The measure provides that red diesel for use as fuel for propelling private pleasure craft can

only be used in UK waters. All purchasers of red diesel for use as fuel for propelling private

pleasure craft will be required to sign a declaration to that effect. All purchasers will be made

aware that if they travel outside UK waters they will be subject to the restrictions and

prohibitions of other Member States.

I know of no interest to some but this will limit for the time being foreign forays.

My understanding is that if marina's put in White there is no exemption as per the propuslsion/heating split at present on Red as HMRCE will not run duel duty on the same fuel.

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Based on the fact I guess Marinas wont be too keen to change as the red is still ok for U.K waters the interesting bit is how are we going to change from red to white in the north sea and flush the tanks.

I spoke to HMRC who suggest that when we fill up in the uk we split the duty paid to cover the amount we will have in our tanks on arrival at the foreign waters at the full rate. The issue then remains that the laws of the foreign country apply in their waters and we could still be fined for having red in the tanks although duty has been paid. They suggested we contact (in our case) the Dutch customs direct to find out how they would hand this situation which I will do and post their reply just as soon as I found out why my telephone system wont let me make international calls!



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Already done that Wayne and here is their reply:-


The point about the new proposed legalisation is that the UK are admitting that we are breaking European laws with our red diesel. Well, the way I read it, this changes nothing at this precise moment...

HOWEVER, it does give the countries who don't like the fact that we have discounted tax on a proportion of diesel the right to fine us when we enter their territory by our own admittance.

OK, so we know Belgium wants to fine us already, but Holland doesn't (according to the letter I received from the Embassy) but the UK's admittance that we are not following European procedure surely will impact on us as time goes on.... Countries like Holland for instance will feel that they have to fine the UK boater due to our own new legislation.

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Thanks Luke

Holland it is then - sod Poirot!

The HMRC guy was saying that Tax laws are "local" laws which is why they can continue with the 60/40 rule. As I see it the difficulty comes on a practical basis - I accept the local laws, taxation and for that matter culture of a country I visit. However you cant just swap from red to white just like that. The Dutch seem to have, for now at least recognised that and adopted a sensible approach to the matter.



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The contents of that standard letter have been posted here before as one of our yacht club and several East Coast MBM Members have had similar replies. Someone must have a full time job in the embassy churning those out just changing the name :roll:

OK, so we know Belgium wants to fine us already, but Holland doesn't (according to the letter I received from the Embassy) but the UK's admittance that we are not following European procedure surely will impact on us as time goes on.... Countries like Holland for instance will feel that they have to fine the UK boater due to our own new legislation

That is my point.

The change is some sort of clarification but if our government are saying it can only be used in UK waters and outside will be subject to rules of the country then it seems to be inviting fines; regrettably.

In the UK HMRCE give us dispensation on the heating element of the fuel we puchase typically 40% this is a UK tax issue which thankfully we are still have control over (just) without recourse to the EU.

In other European countries Red Diesel is often duty free and that is the nub of the issue.

Even the Germans are at it.

http://www.sail-world.com/Cruising/inte ... fuel/87266

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I can see HMRCE sticking to their guns on this.

It looks like in time we will have White Diesel with the same duty as road fuel. I can't see HMRCE agreeing to two tax rates on the same fuel as this would leave it wide open to fraud.

The boat fraternity will get little sympathy from the general public in these times of paying back our debys as by having a boat we are all filthy rich anyway :roll:

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From what I can see there is a way out for the UK other than white.

We already have a dedicated fuel for marine in that it is ULSD with no bio content, different to road as this must have a minimum bio content. And different from red as this can be high sulphur.

Put a dye other than red in it that does not mirror any other EU's duty free fuel, call it marine diesel, allow commercial users to buy it duty free at pumps, the rest of us pay 100% duty but the duty rate would be set at the EU minimum and as such less than we pay for red at a 60/40 split.

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Blue Diesel would seem a way out Ian except I think it is the fact it is dyed that is the issue :cry:

I apologize for the somewhat belated reply to your last email but I wanted to make sure I had all pertinent information in my possession before coming back to you.

Although I understand the difficult position you and other British cruisers are in, I have to confirm that Belgium will indeed continue to fine pleasure vessels using dyed diesel. EU legislation clearly does not allow the use of dyed diesel for leisure vessels and Member States have to conform to this. It is worth noting that Belgium also used to allow for an exemption for pleasure vessels but put an end to it on the 31st of December 2006 in order to be in conformity with said EU legislation.

Belgian authorities have been in contact both with their British counterparts and with the Commission to explain it had no other choice but to implement EU legislation. Not doing so could be considered as an infringement. The Commission has never berated Belgium for its practice of fining the use of dyed diesel. Quite to the contrary, it is my understanding that the Commission has asked British authorities for explanations pertaining to its continued use of dyed diesel and started an investigation against the UK . Some of the confusion surrounding this question arises from early letters from the Commission which unfortunately contain some inaccurate information. As mentioned in my first email, we are currently waiting for a decision from the Commission and will in the meantime continue to respect and implement the EU legislation on the use of diesel.


Serge Dickschen

Counsellor - Political Affairs

Embassy of Belgium

17 Grosvenor Crescent

London SW1X 7EE

020/7470 3727

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So says Belgium Perry but no one seems to be able to find any evidence of this.

I can understand them being upset if we use red as that is the same as fuel marked for low level duty use such as agriculture and makes it difficult for them to police their own boats.

Even if there is something then, by negotiation, if that can be changed to red instead of dyed then everyone should be happy and it can be justified as ensuring that our non bio is not used as road fuel, Something the UK government is very worried about due to our environmental awareness.

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Ian no one would be more pleased than me if we can get an outcome that still allows fuel at current levels, I just think in the current climate it is wishful thinking - but we live in hope.

The RYA document sums up the views and it all depends what view you take.

The specific issue relating to the EU Marking Directive (on the fiscal marking of gas oils and

kerosene) turns on Article 3 of that Directive, which provides that “Member States shall take the

necessary steps to ensure that improper use of the marked products is avoidedâ€. Article 3 goes

on to suggest that the use of marked fuel for “combustion in the engine of a road-going motor

vehicle†is to be regarded as “improper use†but no mention is made of use in private pleasure


The key question is therefore whether the use of duty-paid marked diesel for propelling private

pleasure craft amounts to “improper use†for the purposes of the Directive. The UK and Irish

Governments take the view that the use of duty-paid marked diesel for propelling private

pleasure craft does not amount to “improper use†(and there is no jurisprudence to the contrary)

whereas the Belgian Government and individuals within the European Commission take the view

that it does.

However, interpretation of EU Directives is the responsibility of the European Court of Justice, not

the Commission, and it is certainly not the case that the European Court always supports the

Commission’s view. As such, the Belgian Government and the European Commission simply

reiterating their view does not serve to give that view any greater validity and the only way in

which this question can be answered conclusively is for the matter to be referred to the European

Court of Justice. The European Commission has taken the first steps towards such a referral by

indicating that it intends to take infraction proceedings against the UK.

On the second element, my understanding is that the Belgian Government made it illegal to use

marked diesel in private pleasure craft in Belgian waters shortly after the Belgian derogation from

the Energy Products Directive expired in December 2006. However, there are a number of

circumstances under EU law (including the Energy Products Directive itself) and international law

(such as the 1990 Istanbul Convention on Temporary Admission) in which the main fuel tanks of

Document received from (and copyright of) the RYA – January 2012

a private pleasure craft navigating in Community waters might legitimately contain marked

diesel. We have again sought specialist legal advice and we have been advised that the

penalisation of individual yachtsmen for the mere presence of marked fuel in a pleasure craft's

fuel tanks is contrary to the basic principles of EU law. This advice is consistent with the letter

from the European Commission available on our website and this issue is not, as far as we are

aware, the subject of the European Commission’s infringement proceedings against the UK (the

details of these proceedings being confidential between the Commission and the UK


The RYA continues to lobby the European Commission and the Belgian Finance Ministry, both

directly and through the European Boating Association. We are also working with colleagues in

the Royal Belgian Yachting Federation, who are similarly lobbying their Government (the Belgian

authorities are penalising Belgian yachtsmen who take on marked diesel perfectly legitimately

outside the EU, such as in the US, the Channel Islands or Norway). In addition, the RYA is

supporting the UK Government’s opposition to the European Commission’s infraction

proceedings. However, infraction proceedings can be protracted so, in the meantime, we are

working with the UK Government to explore ways in which the Belgian Government might be

persuaded not to penalise UK yachtsmen visiting Belgium for the mere presence of marked diesel

in their yachts’ fuel tanks.

Stuart Carruthers commented:

Noting Gus’s reply there is a considerable amount on this on the RYA web site at:

http://www.rya.org.uk/infoadvice/boatin ... broad.aspx which might make

useful reading in the meantime and hopefully shows that the RYA has been fully engaged with

this particular problem.

The Belgians are simply stating their national interpretation of the EU Directive as they see it,

which is the basis for this particular problem in the first instance. As the Belgian response

correctly states, this issue is about the use of dyed (red) diesel in boats, not the tax applied since

the ending of derogation. The much quoted infringement proceedings concerns the marking of

fuel not the tax paid on it.

The Commission would appear to agree with the Belgian position and is of the opinion that the

European system of marking has been applied incorrectly and is therefore commencing

infringement proceedings against the UK as a consequence. The RYA acknowledges that Article 3

of the Marking Directive requires member states to take the necessary steps to ensure that

improper use of the marked products is avoided and, in particular, that the mineral oils in

question cannot be used for combustion in the engine of a road-going motor vehicle or kept in its

fuel tank.

Although the Marking Directive requires member states to mark fuel that is subjected to a

rebated rate of duty, the Marking Directive does not prohibit member states from permitting the

use of a marker in fuel that is duty paid at the full rate. While Article 3 specifically requires

member states to prohibit marked fuel from being used in road vehicles, no such mention is

made of private pleasure craft.

Gus has stated to the EU Commission that in the RYA’s view, there appears to be confusion in the

Commission’s mind between supply and consumption. Whether or not the continued supply of

marked diesel in the UK for propelling private pleasure craft is consistent with the provisions of

the Marking Directive is a matter between the Commission and the UK Government, which we

trust will be resolved one way or another as a result of the infringement proceedings. However,

given that there are a number of circumstances under EU and international regulation in which

the main fuel tanks in a private pleasure craft in the EU might legitimately contain marked diesel,

we consider the penalisation of yachtsmen for the mere presence of marked fuel in a pleasure

craft's fuel tanks to be iniquitous and contrary to the principles of EU law.

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While obviously an interpretation that favours the UK view from what is being said there is nothing in there that excludes duty paid red, offering to apply a marker that is intended to ensure that a product designed specifically for marine use and being unsuitable for road use due to the fact that it does not contain bio would seem only to strengthen the UK case. On top of that there could be no argument that it was a reduced duty fuel as it would be taxed at 100% of the EU minimum rate and playing the environmental card never hurts.

It also removes any argument that the permitted use males enforcement of their own compliance impossible if the mark is unique and identifys it as UK duty paid marine fuel.

Blue would not be a good colour though as this is already used for duty free fuel in a number of EU countries.

The changed marker would show consideration to others in their pursuance of enforcement.

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Don't forget there is already a clear precident set by the leisure aircraft side who won their case for minimum duty by claiming that the fuel was not petrol.

I think there is a chance but only one, mess it up and it is full tax white for any coastal boat.

Even if the UK keeps allowing the use of red Its use would mean when it came time to sell you would be selling a sea boat that couldn't go anywhere so boats run on white would be worth more.

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Petrol boats are already easier to sell than they ever have been but I can't see them going up in value.

The problem is when diesel is 15-20p a litre more than petrol how many are going to pay the premium for a diesel boat?

It is just going to bring down the cost of an equivalent diesel boat and although petrol engines only go so big the price drop will go a lot further up the chain.

Might be good news for the likes of me short term but petrol boaters are used to the cost of their boating and their boating habits have evolved around it. The diesel boys will have seen their fuel costs quadruple over the last 5 years which, is not only going to change the way they use their boats but also force quite a few out completely.

Many have large mortgages, either marine or as an extention to their house, finding that boats are no longer a slow or once old enough nil depreciating asset is going to put people off buying a boat in the first place which ultimately going to hurt the marine industry badly.

I don't think that helps anyone in the long term, even boats such as yours which should become very sought after for their economy will eventually be hit.

Much as their will be a temptation to smile from boaters with petrol in their tanks I don't think anyone should be happy about the thought of losing cheaper diesel.

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  • 2 weeks later...

Posted from the big boys site.

Chloe Smith the MP that signed off the Impact Assessment of HMRCE 's statement' has replied to questions with the following statement:

Thank you for your email of 21 February about changes to legislation covering use of red diesel in private pleasure craft.

I am sorry for the obvious concern this announcement has caused you. First, let me assure you that there is no intention to require boat owners to empty their fuel tanks of red diesel, clean their tanks or for the Government to have any involvement in their decisions to travel to other countries.

This has always been a difficult issue for the UK since losing the derogation from the EU Directive which enabled private pleasure craft owners to use rebated fuel, The UK's status as an island nation with a long coastline means that the issue of fuel supply is more of a Consideration for us than for other Member States. This was the main reason that measures were introduced in 2008 to allow private boat owners to continue to use red diesel, with the requirement that the full rate of duty must be paid on the proportion of fuel used for propulsion. The continued use of red was important because, as you say, there is no supply of ‘white’ diesel at ports and marinas, and to install a second supply stream would be costly for suppliers.

Unfortunately, following a complaint from an individual, the Commission challenged the practice of allowing the use of marked fuel in private boats, saying that it contravened the EU Fiscal Marking Directive, which provides for a common system of fiscal marking for fuel which has not borne full duty. Since the Commission began infringement action, our concern has been to find a solution that benefits the widest range of boating interests. An adverse ruling in the European Courts would mean that the UK would be required to ensure that only White diesel was used in private pleasure craft. Although this outcome might suit those boat owners who travel abroad, the vast majority of boat owners and fuel suppliers would not be in favour of such a solution. In consultation with boating organisations, we have, therefore, decided that the wider interest lies in the retention of the use of red diesel.

Talks between UK officials and the Commission last year resulted in a potential solution which would minimise the risk of an adverse ruling should the Commission proceed with infringement proceedings - and we are now optimistic they will not. The solution is for the UK to limit the use of full duty paid red diesel to UK waters, with users signing a declaration that they were aware they would be subject to the restrictions and prohibitions of other Member States it they entered their waters. This proposal is the basis of the announcement I made to Parliament on 20 February. In addition to securing

the continued use of red diesel for UK boaters, these legal changes will allow most users to continue to benefit from the rebated rate of duty for fuel used for domestic purposes on board their boat.

HMRC published draft legislation on its website on 20 February for consultation until 1st March, after which further changes may be made to ensure that the position is quite clear. The intention is to make it clear to users that the use of red diesel is a UK procedure and other Member States may not allow it in their own waters - rather than to make it illegal to use red diesel outside UK waters. The terms of the legislation and the declaration must meet the Commission‘s concerns as well as making the situation clear for users. It is for this reason that HMRC is consulting on the draft terms, and I am grateful to you for your response. Following the consultation period, further details will be published on HMRC's website (http://www.hmrc.gov.uk) in a Revenue and Customs Brief before 1 April.

HMRC has continued to involve boating organisations throughout the discussions and they are generally supportive of this measure, seeing it as preferable to the enforced use of White diesel. It is important to emphasise that, in practice, limiting the use of red diesel to UK waters, so making clear that it is a UK procedure, does not change the current position, as pleasure craft travelling to some Member States already run the risk of being fined by their customs authorities. I do understand that, for those boat owners who travel outside UK waters, the difficulty of obtaining supplies of unmarked diesel is a very real problem but this is a commercial issue, and unfortunately not one to which the Government can provide a solution, I do believe, however, that the decisions we have taken represent the best way of protecting the interests of the majority of boat owners, fuel suppliers and others in the leisure boat industry.

I hope this is helpful. Thank you for taking the trouble to make me aware of your concerns.

Chloe Smith

I think what was said weeks ago still holds true that in some ways nothing has changed except HMRCE statement really says to other member states abroad on our behalf "Open your wallet and let me help myself" :roll::roll:

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Maybe worse than just help yourself to free money David, Unfortunately in order to remain a good EU Citizen country they will be seen as not upholding EU law if they do not fine UK boaters. That is going to spread the problem from Belgium to all other EU States, who will be able to collect the fines under the guise of upholding EU law.

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