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ENERGY GRANTS (CLEANER FUELS) SCHEME REGULATIONS 2004 2004 NO. 96
STATUTORY RULES 2004 No. 96
Issued by authority of the Minister for Revenue and Assistant Treasurer
Energy Grants (Cleaner Fuels) Scheme Act 2004
Energy Grants (Cleaner Fuels) Scheme Regulations 2004
The Energy Grants (Cleaner Fuels) Scheme Act 2004 (the Act) and the Energy Grants (Cleaner Fuels) Scheme (Consequential Amendments) Act 2004 establish the Energy Grants (Cleaner Fuels) Scheme, which will initially provide a grant to importers and domestic manufacturers of biodiesel as a final fuel, and final fuels containing biodiesel.
The purpose of the Regulations is to prescribe matters necessary to enable importers and domestic manufacturers of biodiesel as a final fuel, and of final fuels containing biodiesel, to access a cleaner fuel grant, including methods for calculating the amount of grant to which a claimant would be entitled.
Section 9 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Section 4 of the Act defines 'cleaner fuel' to mean biodiesel, compressed natural gas (CNG), ethanol, liquefied natural gas (LNG), liquefied petroleum gas (LPG), or methanol, or a fuel (including a fuel blend) prescribed by the regulations that complies with each applicable fuel standard for such fuel.
Section 4 of the Act also provides that the 'start day' for each cleaner fuel, other than those fuels specified in the Act, is the day prescribed by the regulations as the start day for that cleaner fuel.
Paragraph 5(1)(d) of the Act allows the regulations to prescribe the last day that provisional entitlements to a cleaner fuel grant can arise for a particular fuel.
Subsections 8(1) and 8(1A) of the Act provide that the amount of grant to which a claimant is entitled is to be worked out in accordance with the regulations (by reference to the offset rate set out in subsection 8(1) if the fuel is one of those specified in the Act).
The Energy Grants (Cleaner Fuels) Scheme (the Scheme) gives effect to two measures contained in the 2003-04 Federal Budget. The first of these relates to fuel tax reform and allows for a grant to be paid to importers and domestic manufacturers of biodiesel as a final fuel, and final fuels containing biodiesel, from 18 September 2003.
These grant arrangements will be extended to the importation and manufacture of low sulphur fuels (premium unleaded petrol with less than 50 parts per million sulphur and diesel with less than 10 parts per million sulphur) from January 2006 and 2007 respectively. This will give effect to the second Budget measure, that is the cleaner fuels component of the Energy Grants (Credits) Scheme, in line with the Measures for a Better Environment commitment to encourage conversion from the dirtiest fuels to the most appropriate and cleanest fuels, as announced by the Prime Minister in May 1999.
The Scheme provides a generic framework for the payment of grants and will therefore also provide the future mechanism for reducing the effective excise rate on other fuels in accordance with the Government's announcements concerning long term reform of the excise treatment of fuels.
The Scheme will be administered under the Product Grant and Benefit Administration Act 2000 (the PGBAA). The PGBAA currently provides the administrative and compliance framework for the other grant schemes administered by the Australian Taxation Office, namely the Energy Grants (Credits) Scheme, the Fuels Sales Grants Scheme and the Product Stewardship (Oil) arrangements.
The Regulations prescribe:
• a biodiesel blend as a cleaner fuel;
• 30 June 2015 as the last day provisional entitlements for a grant will arise for biodiesel blend; and
• methods for the calculation of the amount of grant for a quantity of biodiesel or for a quantity of biodiesel blend to which a claimant is entitled, including requirements for the temperature of the fuel when volume is measured.
The Regulations commenced retrospectively on 18 September 2003.
The purpose of the Regulations is to prescribe a biodiesel blend as a cleaner fuel. A biodiesel blend is defined as a blend of biodiesel and conventional diesel in any proportion, provided that both the biodiesel and conventional diesel components meet the relevant fuel standard for each under the Fuel Quality Standards Act 2000.
The start day for a biodiesel blend is prescribed as the date that the Energy Grants (Cleaner Fuels) Scheme Act 2004 commenced or was taken to have commenced (i.e. 18 September 2003), and 30 June 2015 is prescribed as the last day that a provisional entitlement can arise for a biodiesel blend. The latter date is the date after which the final excise rate will apply for all fuels in the excise system.
The Regulations also prescribe methods for the calculation of the amount of grant to which a claimant is entitled. Different formulas are prescribed for calculating the amount of grant depending on whether the cleaner fuel in question was pure (unblended) biodiesel, or a biodiesel blend (a blend of biodiesel and diesel). The additional formula for biodiesel blends is required to ensure that a cleaner fuel grant is only paid on the biodiesel component of a biodiesel blend.
The Regulations also require that where a manufacturer or importer of biodiesel or a biodiesel blend is required to calculate the volume of fuel at a corrected temperature of 15 degrees Celsius to establish excise or customs duty liability, they are required to do the same to establish the volume of fuel for working out the amount of grant to which they are entitled. This ensures that the amount of grant claimed matches the duty paid, regardless of whether the ambient temperature (and therefore the actual volume of the fuel) differs between the point at which duty becomes payable and the point at which the fuel is finally sold.