Amended biodiesel laws still come with heavy penalties

By: Jason Whittaker


Despite clarifying biodiesel blending laws, the Australian Taxation Office (ATO) will still slug trucking operators with heavy fines who blend

Despite clarifying biodiesel blending laws, the Australian Taxation Office (ATO) will still slug trucking operators with heavy fines who blend certain diesel products without a licence.

The Australian Taxation Office (ATO) has completed its review into laws surrounding biodiesel blending, and has distinguished what constitutes the need for a licence.

Unlike the previous system, it does not matter whether a product is blended ina fuel tank or a depot tank. Rather, the new law deals with what is being blended.

Operators blending pure biodiesel (B100) with duty paid diesel or with a duty paid biodiesel/diesel blend will be considered as having manufactured an excisable product, thereby requiring a licence.

Those caught without a licence may be hit with heavy penalties, determined by the extent of their activities, as well as face retrospective liability for incorrect fuel tax and energy grants credit claims.

However, operators will be free to combine a duty paid biodiesel/diesel blend, such as B20, with a duty paid diesel or another duty paid biodiesel/diesel blend.

Under the previous system, operators were permitted to blend fuels in their fuel tanks without a licence but those with depot tanks were required to hold an excise manufacturer’s licence as well as keep complex accounting records.

While welcoming the clarification, the Australian Trucking Association (ATA) has questioned the decision regarding pure biodiesel blending.

"It doesn’t recognise the situations faced by operators who may have swapped between storing B100 and diesel in the same tank and didn’t realise they were blending the remnant fuel," ATA Chief Executive Stuart St Clair says.

"But it does ensure that operators who top up their depot tank with different biodiesel blends are not unwittingly dragged into the excise system."

The review into fuel tax laws was undertaken last year after the ATA approached the tax office with concerns over how the laws were applied.

Following on from the review, the ATO will in four weeks also clarify what impact blending biodiesel and diesel products has on the fuel tax credits and alternative fuel grants.

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