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Planet or Profit: The Red Fuel Rebate

Feb 17, 2022 | Sustainability

Brewster Bros are known for our commitment to preserving the natural environment whilst providing the construction industry with innovative solutions for managing their resources. With COP26 fresh in our minds and hot on the heels of several major UK environmental targets (namely Zero Waste 2025 and Net Zero’s 70% interim target by 2030), barriers to switching to greener alternatives should be at an all time low but businesses are finding that this is not always the case. 

On the 1st of April, the red fuel rebate is being eradicated for the construction and waste management industries which will have significant cost implications for relevant businesses. With no support to move on to alternative sustainable fuels, companies are unnecessarily having to choose between planet and profit.

Since opening in 2018, we have managed to divert over 810,000 tonnes of construction, demolition and excavation waste from landfills. In doing so, we have extracted 660,000 tonnes of valuable resources to continue their useful lives as recycled aggregates for the construction industry. This circular process along with our backload system, allowing 80% of our fleet’s movements to be laden with materials, has saved 17,000 tonnes of carbon emissions from being created.

In recent months, we have switched our fleet of trucks and on site machinery to Hydrotreated Vegetable Oil (HVO) at an estimated saving of 720 tonnes of CO2 emissions per year. Our move to greener transport hasn’t stopped there, we have also installed electric charging points in our car park and have placed an order for electric cars to replace our existing company cars. 

Discussing these environmental commitments, Managing Director Scott Brewster has said, “some of these operational changes have been at our own expense. While this is our investment choice, given the focus on climate change, I am disappointed the UK government has not done more to incentivise such practises, like reducing the duty on HVO. Biofuel is currently taxed at the same level as fossil diesel, a contradictory approach in my view, especially when it is claimed the red diesel rebate reform is for environmental reasons.”

HVO has up to 90% GHG emission savings versus fossil diesel making it an obvious and simple switch in order to protect the environment and hit Scotland’s Net Zero ambitions. We recognise that if all red diesel users were to switch to alternative fuels overnight there would likely be supply issues, but supply will only grow to meet demand. It’s a bit of a chicken and egg scenario, but we have to start somewhere. HVO is very low risk as it is easily interchangeable with fossil diesel.  Although our switch to HVO has been near seamless, our overheads for fuel have increased more than the percentage increases we are all experiencing at the forecourt pumps

In April, the current red fuel rebate in place that reduces duty for red diesel and biofuels will be scrapped. This will mean that our heavy plant and machinery will incur the same duty rate as on-road vehicles. Without any electric or hydrogen machines of the size we require available on the market, it’s frustrating that UK Government Ministers are penalising businesses for using the most sustainable option available to them – green fuels like bio fuels and HVO. 

Scott believes that, “Incentivising the switch to biofuels should make a huge difference to take-up. For businesses, it is a switch that can be made immediately without engine modifications or infrastructure investment; a contractor could simply fill their excavators with diesel one day, then biofuels the next. While we wait for the technology for electric and hydrogen machinery to become available, the next logical step is to support the uptake of biofuels.”

“The Scottish Government is working on a waste targets route map and I am pleased to be participating in its working group. The new plan will demonstrate how Scotland will meet waste and recycling targets for 2025 and identify how the waste and resources sector will contribute towards Scotland’s journey towards net zero from 2030. While there is a focus to reduce the well known, higher polluting forms of waste such as plastics, there is a huge opportunity to reduce soil and rubble, the materials that make up 70 percent of construction waste.”

New forms of green legislation and taxation will be introduced over time and as they are, it is essential for businesses to be supported so that they are in the position to meet new building standards and regulations without being penalised.

Aside from the financial issues caused by such legislation changes as the Red Fuel Rebate, Scott highlights another issue affecting business. “It is generally accepted that we are all going to have to bear the cost of the green revolution. It’s the sudden dramatic nature that will hit businesses the hardest. Industry needs to be eased into it. Otherwise the consequences are knee-jerk inflation spikes like we are currently seeing.”

There has been a notable shift in construction in recent years pushing Scotland’s worst offending industry for waste, carbon emissions and natural resource consumption into a greener future but in order for them to do this, we need the Government’s support to supercharge the transition to Net Zero and Zero Waste.