Control the Cost Impact of Red Diesel Fuel Legislation
04 May 2022
New fuel regulations in the United Kingdom strictly prohibit use of red diesel fuel in construction machines. Here’s tips and technology to help you control costs and stay compliant.
As of April 2022, the UK implemented new governmental legislation regarding the use of red diesel within the construction industry. This policy change removed the existing entitlement to use red diesel from most sectors in order to help the UK meet its climate change and air quality targets. With this change, however, construction companies now face a significant increase in fuel costs.
The cost of fuel is rising all across the world. Studies in Europe show that almost a full third of the total operating cost of a typical construction site can be attributed to fuel usage1. Combine that with the growing urgency of our sustainability goals and finding ways to burn less fuel may be more important than it has ever been.
Cat® construction technologies such as VisionLink® and Cat Productivity put the information in your hands to identify areas where you can most effectively reduce fuel burn.
THE REGULATORY BASICS
For many years in the UK, select off-road industries, including haulage, construction, marine and agriculture, received a rebate on diesel fuel through the use of red diesel. This rebate helped construction companies control their overall operating costs.
Red diesel was historically used for off-road vehicles and equipment while white diesel was used within motoring and other on-road vehicles. The white fuel duty was intended to be a tax on motoring, hence why construction was one of a number of industries that could use red diesel. Now that UK legislation restricts the use of red diesel fuel in construction machinery, any contractor found to be running red diesel may be subject to significant fines.
Red diesel has been restricted for a variety of industries, not just construction, to help accomplish the government’s goal of reducing all greenhouse gas emissions in the UK to net zero by 2050. The goal of this legislative change is to encourage industries to use less fuel, improve energy efficiency and in the long term invest in more environmentally friendly fuels.
HOW MUCH WILL COSTS INCREASE?
Since fuel is one of the largest contributors to operating costs, this change will impact all construction businesses relative to their size and hours of operation. How much? The price of white diesel fuel is approximately 46 pence a litre higher than that of red diesel. While fuel costs vary by machine and application, a total fuel bill could easily rise by as much as 40%. That’s a considerable cost increase for any operation.
One way of maximizing productivity and profitability for your operations is through the use of digital job site solutions. Technologies like VisionLink and Cat Productivity allow you to perform job site and equipment performance analysis including factors that affect usage such as idle time, payload and cycle times.
With that kind of information available, job site supervisors can make data-driven decisions that make the most efficient use of fuel while maximizing productivity
DATA-DRIVEN DECISIONS HELP CONTROL COSTS
Becoming more efficient means eliminating guesswork. Fuel usage is tied to core construction operations, so it’s important to measure and understand what is currently happening on your job site. You can use those precise benchmarks to target improvements. We recommend identifying the following:-
- How much material are you moving?
- How long does it take to move that material?
- How much fuel is being used to complete these tasksper machine/fleet/shift/site?
- How much fuel is being used for production and howmuch for idle time per machine/fleet/shift/site?
VisionLink and Cat Productivity capture and compile data from your equipment to precisely answer these questions. Caterpillar’s scalable digital solutions and range of subscription levels can be tailored to match your operation, information and job site requirements.
Armed with accurate data you can take actions to control fuel costs. Take a look at these proven strategies:
Reduce Idle Time
Monitoring your data with tools like VisionLink and Cat Productivity gives you insights that can enable you to engage with your operators, helping them to understand the financial and environmental impact of unproductive idle time. When operators can actually see the positive impact that they have on production, it can be motivating and empowering. When operators see the impact of working together to achieve
Make Site Layouts More Efficient
Cat Productivity can help spot inefficiencies in your site layout. Look for machines that are waiting longer than necessary to load (and increasing idle time). Is the wait the result of a traffic issue? Is the design of the haul road creating the bottleneck? Are haul road conditions slowing down traffic? Reviewing the data and answering these questions may point to the need for layout changes, better haul road management or machine speed management. Whatever the solution, the result will be improved efficiency, reduced unproductive idle time and less fuel burned.
Improve Your Machine Match
If Cat Productivity indicates that you have long idling events taking place in the loading area, there may be a potential mismatch between the loading tool and truck size. Check the number of passes and time required to load. If the number of passes is greater than five, it may be a sign that you need to re-evaluate the size of the loading tool or bucket capacity or an opportunity for operator training. The correctly matched loading tool will result in fewer trucks waiting, reducing inefficient fuel consumption in the loading area.
Educate and Empower your Operators
Monitoring your data with tools like VisionLink and Cat Productivity gives you insights that can enable you to engage with your operators, helping them to understand the financial and environmental impact of unproductive idle time. When operators can actually see the positive impact that they have on production, it can be motivating and empowering. When operators see the impact of working together to achieve measured goals, it can build pride and job satisfaction. For example, one Cat Productivity customer shares idle time reports daily with operators, helping them to identify where they can improve. If they reduce unproductive idle times in line with targets, they earn special incentives each week.
HOW YOUR CAT® DEALER CAN HELP
Remember your local Cat dealer is ready to be your first line of defense in boosting efficiency and productivity while helping you reduce operating costs. A rise in fuel prices is never welcome. But your Cat dealer can help you work more efficiently with VisionLink and Cat Productivity—smart ways to build your business. Talk with your local Cat dealer or learn more about how data can help you reduce operation costs