Construction industry calls for tax cuts for green fuels
the British government was urged to accelerate the transition from red diesel by supporting the construction industry’s commitment to truly lower carbon fuels and by furthering its efforts to address the current shortage of truck drivers.
From April 2022, construction companies can no longer take advantage of the discount on red diesel for off-road systems.
With limited alternatives available, this increase will not reduce CO2 emissions as companies switch to normal “white” diesels, but will place an additional burden on already ailing construction companies and affect their ability to provide the infrastructure we need.
A Association of Builders The Member Survey (CECA) found that the new rules will cost any SMB construction company between Â£ 250,000 and Â£ 600,000 a year, with nearly half of companies worrying about their ability to continue trading.
Lower carbon alternative fuels are available, including some hydrogenated vegetable oils (HVO), but will also be taxed at the full rate from April 2022, which acts as a barrier to inclusion as a lower carbon alternative.
CECA Director for Foreign Affairs, Marie-Claude Hemming, said: “While the government has legislated that the tax break on red diesel use in construction will be abolished, it has also removed any incentive for greener fuels.
âThis policy increases tax revenues, but no longer offers the possibility of choosing alternatives with lower CO2 emissions.
âCECA believes that in order to meet the environmental goals, genuinely lower carbon fuels should be exempted from the same tax rates as standard fuels.
âOur members are aware of their responsibility to protect the environment for future generations. We are committed to working with the government and fuel suppliers to ensure that truly lower carbon fuels are used throughout the construction industry.
the National building association (NFB) welcomed the government’s announcement to issue three-month visas to foreign truck drivers, but warned that this is nowhere near enough to address the current shortage and urges ministers to go further.
Product and material prices in construction have skyrocketed for NFB members and the industry alike, with the material price index increasing 20% ââyear over year in July 2021.
The reasons for this inflation are many, but one factor is the lack of truck drivers, which reduces supply and drives up transportation costs. In response to the worsening situation, which culminated in panic buying of fuel over the weekend, the government has announced that it will issue up to 5,000 short-term truck visas by Christmas Eve.
However, industry associations in other industries warn that this is nowhere near enough to meet demand. the British retail consortium said that the supermarket sector needs at least 15,000 drivers and the Association of Road Transport Companies (RHA) stated that the current shortage of people is around 100,000.
Head of Politics at the National Federation of Builders, James Butcher, called: “The government has long advocated the benefits of an independent immigration system. Now is the time to recognize that flexibility and respond to the needs of the labor market by issuing a lot more short term visas for the drivers we need. Unfortunately, the announcement of only 5,000 visas will not solve our current problems by far and will continue to affect the construction sector in terms of both availability and material prices.
“In order to remedy the bottlenecks in the long term, the government must also work with the freight forwarders to remove the barriers to entry into the domestic industry. It must also help create incentives, such as pre-financing training in return for contracting services that could be introduced at national level and coordinated through a national strategy. “