5th June 2006, 01:48 PM
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| Biofuels Forum Newbie | | Join Date: May 2006 Location: Brisbane
Posts: 2
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| Re: Containerised Plants
Tubby,
Building a plant is something that we can possibly discuss at a later date but I had a look at your question about what the government announcements re. 1 July 2006 will mean night. When I looked at the question I found the whole tax treatment of biofuels was very complex and decided to try to work through it.
I am keenly aware that some of the information below my be wrong (or indeed, very wrong) but I am posting it as a starting point - I hope that others others will contribute their understanding and correct any mistakes or enlarge on some of the questions.
My understanding is that there are 5 sets of tax/government support issues that have an impact on the tax treatment of biodiesel and while each of them is relatively straightforward it gets complicated when they overlap.
Set 1: Situation now (June 2006) - Standard excise duty with full refund.
Biodiesel is currently subject to 38.14c/litre tax but this is refunded in full by an equivalent production grant.
Set 2: Introduction of tax on biofuels 2011 - 2015
Biodiesel will be fuel tax exempt until 2011. From 2011 to 2015 the net fuel tax will increase gradually to 19.1c per litre (as refund decreases). This is approx half the ordinary tax on petrol and diesel when used for cars and trucks of less than 4.5 tonnes.
Set 3: Government reform of tax on fuel used for business.
The government is in the process of making the following business uses of fuel tax free (dates for implementation in brackets):- Fuel used 'off road' (phased btw 2008 - 2012)
- Power generation (1 July 2006)
- Burner fuels (heating / kerosene) (1 July 2006)
- Fuel used in trucks heavier than 4.5 tonnes (1 July 2006) to be replaced by a 'flat?' Road User Fee. I don’t know how exactly this Road User Fee is calculated (the National Transport Commission does it) but I understand that it is likely to be only 20c per litre.
Set 4: Phase out of Alternative Fuel Grant under Energy Grants (Credit) Scheme - phase out (2006 - 2011).
Under this scheme set up on 1 July 2003, business users of biodiesel get a grant of 18c/litre. This will be reduced to 14.8c/litre on 1 July 2006 and disappear completely by 1 July 2010.
Set 5: Biofuels Capital Grants project
This is a government scheme that closed in 2004. It is not really related to tax but it gives successful applicants a grant of 16c/litre of biofuel. It is relevant in that producers who got grants will enjoy this grant in theory, although I practice the money was paid out to them at the time their production facility was created.
I have worked out two tables that I think set out the tax treatment of biodiesel when compared with (1) business use fuels and (2) private use fuels - I've attached them to this post as a PDF. Please report back on any errors they find or further information they come across.
Paddy
Last edited by Robert; 6th June 2006 at 11:31 PM.
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