This question is sometimes asked because people see Red Diesel advertised and assume that it must be something new or different.
In fact, it’s no such thing and as such there is not a specific Red Diesel technology.
Quite a few governments around the world recognise that their vast revenue-raising activities through taxes on fuel can, in some sectors, cause real hardship and economic problems. Examples might include things such as heating fuel in countries with a predominantly cold climate or agricultural fuel in countries which have a huge reliance on agriculture as an industry.
As a result, some effectively subsidise things such as their food production by allowing farmers to access cheaper diesel for their agricultural equipment.
Different countries have different policies here and some may give a relatively higher tax break for heating fuel than for agricultural machinery fuel or vice-versa etc.
Tax avoidance and chemistry
The problem for governments determined to raise as much tax as possible through fuel consumption arises from the fact that heating fuel, agricultural fuel and the diesel cars burn in their engines are all relatively similar.
There are differences but in practice, it would usually be possible to run some types of domestic car on subsidized heating or agricultural fuel.
So, the challenge for said governments is to make sure that the tax-subsidised diesel fuel is used only in heating systems or agricultural machinery, as opposed to in private cars and so on.
Some do this via the nifty trick of adding a stain colour, typically red, to diesel intended for heating or agricultural purposes.
This is colloquially called “Red Diesel” in many countries.
Of course, there isn’t a lot a government can physically do to stop someone putting cheap agricultural diesel into their car but most countries apply heavy fines to anyone caught doing so. It isn’t unknown for police forces to pull cars and particularly commercial vehicles over just in order to sample the diesel in their tanks to check whether it contains the red dye.
Almost inevitably this has given rise to something of a cottage industry whereby people claim to be able to filter the dye out of the diesel so it can be ‘safely’ put into private cars. Although different sources dispute the economics of this, many argue that the cost of removing the colour stain, in chemistry terms, actually exceeds the savings made by using it in your private car.
The moral argument
Just like with any other tax avoidance schemes, governments point out that defrauding their respective taxation departments of the full amount of tax on fuel is effectively robbing your fellow citizens.
The response from some groups using Red Diesel illegally usually runs along the lines of stating that taxation in the western world is now out of control and something that is killing our society and civilisation.
Whichever set of views you subscribe to, it is certain that the stained fuel debate and its attempted illegal use will continue for the foreseeable future.
So in summary this is not a technology but rather a taxation debate!