Weekly Snapshot

Our five minute roundup of key topics affecting UK ports sector this week

The BPA is seemingly just as confused on the parameters of a work event, as I saw Richard bringing a suitcase of wine into a Port Marine Safety Code Working Group meeting this week. 

Other work events this week included the BPA's results of research into open-loop scrubbers, a call with HMRC on red diesel, a trip to Purfleet, and the first of many of 2022's working group discussions. 

More broadly, there have been drops of positive news on the economy this week as new figures from the ONS show that the UK economy surpassed its pre-pandemic level for the first time in November. This was the likely high point in 2021, with figures collected before the Omicron variant entered the fray. Also, the pound’s trade-weighted index has risen to its highest level since Brexit, as worries over Omicron’s long-term impact ease.  

On Covid, restrictions in Scotland and Wales are due to be dialled down over the next week, as it appears most of the UK has surpassed its Omicron peak. In England, the self-isolation period has been cut from seven to five days – a move to hopefully reduce staffing pressures across the economy. And from next week, French ski resorts will return to their equilibrium of dealing with intoxicated Brits as France relaxes its restrictions for vaccinated UK travellers.

If the past two weeks is anything to go by, 2022 looks to be a quiet year.

George Finch
British Ports Association

Changes to the Red Diesel Rebate

Ahead of the plan to remove the entitlement to the red diesel rebate for most non-road mobile machinery in April, we arranged a short call with HMRC this week to give members the opportunity to ask questions about the change.

We will be circulating a note to members shortly with some of the key messages but it is important to be aware that the entitlement to use red diesel in most port non-road mobile machinery is ending from April. HMRC have said they will take a pragmatic approach to enforcement but at the same time they say the law is 'black and white' and they will not hesitate to take action where ports are using red diesel without the entitlement from April. They strongly suggest ports run down their red diesel storage before the change to ensure they are not putting red diesel into engines after April, although tanks will not need to be flushed. Members are encouraged to keep full records of fuel purchases. The whole commercial boat operating industry will retain the red diesel entitlement, as will leisure users. However ports, terminals and marinas will generally not be able to use red diesel in their landside equipment, even if they are used to handle forestry products, grain or agricultural products, or seafood. Whilst these sectors will retain entitlement to use red diesel, HMRC do not believe that this extends to cargo handling or transport. The latest HMRC guidance is here.

Previous analysis submitted by the BPA to Treasury as part of efforts to delay this change estimated that this would cost the 'average' cargo terminal up to £1,500 per day in additional duties, with the largest ports and terminals paying several times that. The prospects for reversing this change are extremely slim and we are now focussing on what government can do to support transition and will be bringing forward new proposals soon. We have also been prioritising events and work to help share information on alternatives to diesel.
The Agenda for 2022

The BPA has established its agenda for UK ports in 2022, with reducing emissions and supporting biodiversity high on the list of priorities. Following COP 26 in November, climate change is expected to grow in policy importance, including net zero targets and sustained calls for a green maritime fund.

Freeports and ‘levelling up’ will also feature as prominent BPA priorities in 2022, with BPA Chief Executive Richard Ballantyne saying:
“It is now time to further explore the opportunities to help ports be the hubs of local, regional, and even national economic development and job creation. Freeports is a good first step, but we need to be more inclusive around all areas of the country.”

The BPA is also looking to capitalise on policy and regulatory wins from 2021. These include funding and support for the sustainability agenda, planning and consenting improvements, resources for transport connectivity, and a viable dredging framework.

We've noticed an increase in queries from ports about open-loop scrubbers again in recent months. At a well-attended call this week with several  of our working groups we agreed some next steps to support ports make informed decisions. We do not have a formal position on the use of open-loop scrubbers in harbours but are keen to support members whatever their position might be. We understand that there will be a large number of factors that go into making any decision on their use in harbour areas.

The BPA presented some private research on what ports are doing and we will be updating this in due course. We will also be writing to port members shortly to share what we plan to do next to support members on this. Please do get in touch if you have any questions or have any developments to share:
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