The Government's application to renew the derogation from the EU Energy Products Directive which allows the use of rebated gas oil ("red diesel") in private pleasure craft has been rejected by the European Commission.

The Government is aware that this decision will have disappointed many boat owners and others in the leisure boat industry. Unfortunately there is no scope for overturning the Commission's decision, but officials have begun the process of meeting concerned and affected organisations to discuss the implications of the Commission's decision, and the Government will be exploring the options for the most appropriate implementation.