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<p>At Budget 2020, the Chancellor announced that the Government would remove the entitlement
to use red diesel from most sectors from April 2022. This more fairly reflects the
negative environmental impact of the emissions produced and helps to ensure that the
tax system incentivises the development and adoption of greener alternative technologies.</p><p>
</p><p>The Government recognised that this would be a significant change for some
businesses and ran a consultation to gather information from affected users on the
expected impact of these tax changes and make sure it had not overlooked any exceptional
reasons why affected sectors should be allowed to continue to use red diesel. During
the consultation period, the Government engaged directly with a wide variety of organisations
from all parts of the UK.</p><p> </p><p>Following the consultation, the Chancellor
announced at Spring Budget 2021 that the Government would grant further entitlements
to use red diesel after April 2022 for a limited number of users. However, the Government
did not believe that the case made by sectors that will not retain their red diesel
entitlement outweighed the need to ensure fairness between the different users of
diesel fuels and the Government’s environmental objectives.</p>
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