UK fined €32m over yacht fuels used in last days as EU member

<span>Photograph: Jinny Goodman/Alamy</span>
Photograph: Jinny Goodman/Alamy

The UK has been fined €32m (£28m) by the European court of justice (ECJ) over yacht fuels used in the dying days of EU membership.

In a sign that Brussels can still bite after Brexit, the court rejected arguments from the UK that its infringement procedure was premature as it needed time to implement new rules in a challenging period that included the Covid pandemic and the 2019 elections.

The ECJ said the UK government had failed to ban the use of “marked fuel”, known in the UK as red diesel, “in private pleasure boats within the time limit prescribed by the European Commission”.

A ban on red diesel to propel yachts or pleasure craft had been introduced in 2018, even if it was taxed at the full VAT rate like conventional diesel. The measure did not affect owners of houseboats or commercial ships, cruise liners or ferries but it would have hit owners of up to 150,000 private pleasure craft in the UK.

Infringement proceedings against the UK were brought in 2020 with a deadline to comply but the UK argued the proceedings had been brought “prematurely”. In a show of force, the ECJ decided to base the fine on the GDP of the UK as a whole.

The ECJ said the rule had applied to the entire UK for almost three years since the original ruling and it was therefore not relevant that it only applied in Northern Ireland since Brexit came into force in January 2021.

The ECJ rejected arguments that the rule could not have been applied between 2018 and 2020 due to complications such as the 2019 general elections, public consultations, the variety in port sizes or supply difficulties during the pandemic.

“In that regard, the court recalls that the practical difficulties referred to by the United Kingdom cannot be taken into account as a mitigating circumstance,” the ECJ said.

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Under the Brexit withdrawal agreement, the ECJ can still take action against the UK if it fails to comply with the new trading arrangements in Northern Ireland.

A UK government spokesperson said it was disappointed with the ruling as it had implemented the ban on the particular diesel in pleasure boats in 2018 and the dispute was merely about the “marking” of the diesel – which allows authorities to distinguish between regular and commercial oil.

“This is ultimately a historic case which began at a time when the UK was a member of the EU. We have now left. Since then, we have negotiated the world’s largest zero tariffs and zero quotas deal with the EU, and are now focused on using our Brexit freedoms to the benefit of the British public,” they said.