Britain and Ireland are cracking down on the fraudulent use of red diesel with a new labelling scheme.
They are to bring in a new product to mark rebated fuels in a move that will boost both countries’ fight against illegal fuel laundering.
The marker will help HM Revenue and Customs (HMRC) and the Irish Revenue Commissioners tackle the criminal market in off-road diesel, marked with a red dye in the UK and green in Ireland, and also kerosene primarily used for heating oil.
Excise duty on rebated diesel is charged at a lower rate than standard fuel duty.
The new marker will make rebated fuel much harder for fraudsters to launder – remove the marker from it – and sell on at a profit.
The use of illicit diesel is estimated to be 12-13% of the market share in Northern Ireland and about 2% in the rest of the UK. Rebated fuel use is strictly limited to mainly agriculture, construction and heating use.
Nicky Morgan, economic secretary to the Treasury, said: “Using illicit fuel is not a victimless crime; it robs the Government of tax revenue that is used to fund vital public services and puts those businesses that follow the rules at a commercial disadvantage.
“It also has a severe environmental impact, with considerable clean-up costs for local councils.”