"and given the problems of checking what is in your tank, it would probably be cheaper to process a "Duty Rebate" scheme for valid users. This would eliminate the added increase due to low demand or the risk of lack of supply."
I assume you mean ; do away with red diesel? Don't you think that would increase the oppertunity for fraud? ie Put white diesel in your road car, but claim it was for your trawler / Ferry / Workboat. Goverment won't wear that one!