IT'S the change many in the industry have dreaded.

From today, rebated red diesel can no longer be used in most machines, vehicles and appliances as the fuel loses its special tax status. 

While the government says the move will help protect the climate and reduce emissions, critics - including many in forestry - have said it will only add to rising costs that threaten to cripple whole industries. 

READ MORE: Voice from the Woods February 2022: Red diesel, loaders and sawmills

So, what's changing? Who will it affect? What are the costs likely to be? We've tried to explain it all to help you adjust to the news. 

What is red diesel? 

Forestry Journal:

Red diesel is fuel intended for use by vehicles and machines other than road going vehicles, with a reduced (also called ‘rebated’) rate of duty. 

To help ensure that rebated fuel is only used for permitted purposes it is marked with a red dye and other chemical indicators. This is why we call rebated fuel red diesel and fuel intended for road going vehicles, with duty charged at the standard rate, white diesel. 

What's changing? 

From today (April 1, 2022), the law will change so that rebated fuel use is limited to certain types of vehicles, machines, and appliances when the fuel is used for specific purposes only.

This means that most sectors that currently use red diesel for off-road purposes will lose the entitlement and will have to use white diesel.

Other rebated fuels affected by these changes include: Hydrotreated Vegetable Oil (HVO), biodiesel and bioblend, and fuel substitutes.

Who will be affected? 

Thankfully, forestry as a whole has clung on to its tax relief status, meaning many in the industry will still be able to use red diesel under the 'old rules'. However, there are some notable exceptions.

Despite an agonising fight and multiple attempts to lobby ministers, sawmills and wood processors have lost out and will have to use fuel taxed at the standard rate for diesel; but, the government is allowing the use of any fuel purchased before June 10, 2021, without any extra cost.

Forestry Journal: Sawmills have lost their right to use rebated red diesel Sawmills have lost their right to use rebated red diesel

When the changes were announced in 2020 by Chancellor Rishi Sunak, he said: “I have heard the concerns about agriculture particularly from the NFU and rural colleagues and have decided that agriculture [which includes forestry] will retain the relief.

"I’ll also keep the relief for rail, for domestic heating and there will be no impact on fishing.”

How will this affect costs? 

In brief ... a lot. Fuel duty currently costs 52.95 pence per litre on 'normal' petrol and diesel, around 40p more than red diesel is with its rebated status. 

Even for those who retain the benefit, prices are still much higher than at the turn of the year. In January, red diesel was going for around 70p/litre, but is now widely selling at 100p/litre. This is down from a March peak of 150p/litre. 

That's if you can even get your hands on it. There are multiple reports from across the country of contractors struggling to receive red diesel deliveries. 

READ MORE: Forestry sector at risk of 'collapse' over 'unsustainable fuel costs' and red diesel changes, warns FCA chair

Forestry Contracting Association (FCA) England chair, Simon Bowes, said last week: "An already marginally profitable sector in forestry, a key sector, is under serious threat of collapse.

"Work priced going forward is not now viable, long-term contracts are now guaranteed to cost money to complete, with the outcome likely to be bankruptcy for the contractor."