You may be interested in an email I received while discussing derogation with MEP Bill Newton Dunn:

Chris
MEPs are there to represent your views and to try to change decisions, where they can be changed, to help you. So your instinct, in general, is correct.
In this case the EU law has been made clear - and can only be changed by a ruling of the ECJ (Europe's supreme court) or by getting an EU law-change passed through both chambers (we in the parliament representing the people) and also the Council (representing the 27 state
governments) - i.e the two chamber principle.
The red diesel case is this as I now understand it : the law has been passed and has been clarified. You and fellow sympathisers could mount a court case to try to show it has been wrongly passed or interpreted - but that costs millions and is therefore, I presume, out of the question. Second alternative : to get the law amended - which would take several years and requires consent from a majority of the 27 governments and MEPs from the 27 countries, apart from the first problem of even getting it onto the political agenda when there are other "bigger"
matters already on the agenda (like Global Warming, the Middle East, World Trade negotiations, International Organised Crime etc).
So, according to that blog you pointed me to, the next immediate step lies with the British government in London.
My long-term view, for what it is worth and you will not like it, but it is my duty to give it to you - is that a. the UK exemption from full duty on red diesel has been objected to "by the rest of the EU" as an unfair advantage for you, their competitors in the UK, when the Single Market is meant to be a level playing-field, and b. it is also an unfair advantage to you which means that other UK tax-payers have to pay slightly more tax in order to raise the necessary revenue for the Chancellor of the Exchequer in order to pay for the UK government spending each year. Other UK taxpayers would be entitled to ask you why you should have a tax benefit and make them pay more.
Therefore, my feeling is that there is very little likelihood of your overturning the situation - and that your only, highly expensive, remedy is the remedy which all citizens have - to go to court and get it overturned.
Sorry to be depressing, but you asked for my advice ! Palatable or unpalatable.
All the best
Bill ND