“Red diesel is a well-intentioned symbolic policy”

Red diesel, the cheaper fuel for farmers that was cut in 2013 due to the credit crunch, is making a comeback. In the coalition agreement of the ruling parties, it was listed as one of the most important points won by the BBB. “We are very proud that we were able to arrange this,” Caroline van der Plas said during the presentation of the coalition agreement in May.

This week, Nieuwe Oogst focuses on making agricultural machinery more sustainable. Important because with the Paris climate agreement, buyers of agricultural products are aiming for low-emission operations. Just like cars, ships and planes, agricultural machinery also falls under the mobility sector and must be emission neutral by 2050.

There is a lot technically possible, but the cost of low-emission machines is so high that no farmer wants to believe in them. Retail and food companies demand them, but they save compensation for the high cost. So the machines have not yet started to be used.

The correct role of government is also crucial. The question is whether further development of low-emission production will help bring red diesel back into use. It should help farmers lower the cost. At the beginning of this year, German farmers were still fighting against the abolition of excise tax benefits.

The sources in the Nieuwe Oogst article are clear. The re-introduction takes the sector back in time. Given the already existing tax on CO2 emissions, the benefits of the red diesel excise tax will no longer apply.

It would have been more fashionable to impose a reduction in tariffs on renewable fuels. Farmers would benefit from this as producers and users. This makes the introduction of red diesel primarily a well-intentioned symbolic policy.