UK fined €32m over red diesel use in pleasure boats

Katy Stickland

The Court of Justice of the European Union has fined the UK €32m for its delay in banning the use of red diesel in private pleasure boats in Northern Ireland

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The UK has been fined €32 million by the Court of Justice of the European Union for its delay in banning the use of red diesel to propel pleasure boats in Northern Ireland.

In 2018, the Court of Justice of the European Union found that the UK wasn’t complying with the EU Fuel Directive by allowing leisure vessels to use marked diesel.

The UK Government didn’t introduce the red diesel propulsion ban in Northern Ireland until 1 October 2021.

Owners of private pleasure craft – with one fuel tank for both propulsion and non-propulsion – in Northern Ireland can’t use red diesel unless it was put in the tank before 1 October 2021 or in a jurisdiction where red diesel can legally be used to propel a pleasure boat, like Great Britain or the Channel Islands.

Even though the UK has left the European Union, Northern Ireland remains part of the EU single market and is still bound by its rules.

red diesel being pumped into a yacht

The Court of Justice of the European Union argued that allowing marked fuel to be used for propulsion made it impossible to know if the fuel had been taxed at the full rate

Under EU rules, fuel must be marked with a dye if it is sold at less than the full tax rate.

The Court argued that by dying all marine fuel red, it was impossible to identify if owners of pleasure boats had paid the full duty on fuel used for propulsion.

“Fiscal marking is intended to make it possible to identify gas oil that is not subject to the full rate of taxation, such as that used in commercial boats. That aim cannot be achieved if the marking may also be used for gas oil intended for uses subject to taxation at the full rate, such as that used for propulsion of private pleasure craft,” said the Court of Justice of the European Union, in a statement.

The UK Government had argued that it could not apply the 2018 ruling due to “difficulties related to the legislative procedure, the general election (2019), public consultations, geographic features, the variety in port sizes, difficulties in supplying both marked fuel and unmarked fuel, or the COVID-19 pandemic.”

This was rejected by the Court, which stated that “both United Kingdom citizens wishing to enter waters of neighbouring Member States, and citizens of those Member states wishing to enter United Kingdom waters and needing to refuel with marked fuel before returning, risked facing difficulties during checks by the authorities of those Member States and, in particular, having fines imposed on them by those authorities. In that regard, the Court recalls that the practical difficulties referred to by the United Kingdom cannot be taken into account as a mitigating circumstance.”

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In England, Scotland and Wales, boaters can still use red diesel to propel their vessels, although the subsidy has been removed except when it is used for heating onboard.

Most marinas in these three countries sell red diesel on a 60/40 split of full and lower tax rates for propulsion, and heating or power generation

The Cruising Association, The RYA and British Marine have all campaigned against the banning of red diesel for vessel propulsion, arguing there is not the infrastructure for the provision of white diesel at marinas, and the alternative – buying white diesel from filling stations in jerry cans is problamatic due to environmental hazards.

The RYA is recommending 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.

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