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I have been told that there is now, no duty to pay on using SVO and WVO as a road fuel ??? I find this difficult to believe. Something like we are allowed to use upto 25,000 litres a year duty free?
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Where you told this on April 1st?
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www.hmrc.gov.uk/briefs/excise-duty/brief4307.htm
:-)
For some reason not widely publicised by HMG....!
--
RichardW
Is it illogical? It must be Citroen....
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Dead right (as RichardW points out). Sorry, i meant to post on this a month ago when it came into effect.
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Sorry, posted too soon... but it is 2,500 litres a year. So I suppose about 20,000 to 25,000 miles.
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But this says producers of biofuels pay no duty on upto 2,500 litres produced per year. There is no mention of no duty when this is sold on to the end customer (probably with some middle man). Or am I missing something? I thought there was duty on biofuels at the pump.
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Okay this is saying if you produce your own biofuel then nothing to pay. So is used chip fat a biofuel :-)
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>>So is used chip fat a biofuel :-)
Yup. Provided its chemical characteristics are within the tolerances permitted by HMRC.
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Link to HMRC site: tinyurl.com/yocb8e
"'Bioblend' means any mixture that is produced by mixing:
Biodiesel; and
heavy oil that has not been charged with the excise duty on hydrocarbon oil."
Now, I in no way hold myself out to be a fuel duty expert. But isn't this latter heavy oil just 'red diesel'?
So rightly or wrongly it struck me that provided you add a teaspoon of vegetable oil to your red diesel tank you have created a bioblend which you can use in your car. Any comment?
The above link points out that there are pretty stringent definitions of suitable diesel and that you have to fall within them in order to have created biodiesel. By using (virtually) pure red diesel you can be pretty confident that your recipe 'works' in terms of the law.
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Reading the link carefully, it seems to say that registered producers who produce less than 2,500 litres will be deregistered and in future will not have to submit returns. But it does not actually say that there are no formalities in becoming a new small producer, which is obviously what one would have to become in order to add ("blend") the teaspoon of cooking oil into the red diesel.
Too good to be true, or a rare government cock-up that actually benefits the motorist?
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"Heavy oil" is DERV, "Gas oil" is red diesel.
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"Heavy oil" is DERV "Gas oil" is red diesel.
So what is "heavy oil that has not been charged with the excise duty" ?
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Astonishing but true. I rang Customs & Excise for clarification: The small producer (< 2,500 L per annum production) can simply inform the Excise & produce up to that amount entirely excise free. I asked what their definition of a 'producer' was & whether, in effect, I could as 'Joe Bloggs' private citizen put home produced biofuel in my car with no excise dute: they said yes! Simply register yourself as a small producer (forms, I believe, are available)
The 2,500L p.a. wouldn't be commercially viable methinks, so is this aimed at the 'private' individual?
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Thanks, Cliff.
2500 litres is almost exactly one tank of fuel a week.
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A typical diesel car might do 40 mpg, which is 9 miles/litre, so the producer/driver could cover 22,500 miles a year, which is some way above the average.
Can anyone provide rough costs of production of bio-fuel from raw materials? It's almost worth thinking about, given that I already have a 405TD, and I have the space to do the production.
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I suggest a visit to the Dick Strawbridge site which has a forum for such questions.
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Even better if you have a few acres available to grow rape, ly. Of course linseed is much better looking but doesn't produce as much oil.
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What was their definition of "biofuel"?
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As someone who runs a car on an SVO blend with Diesel I have been taking interest in this issue. There is a lot of confusion over it, with some people saying that pure vegetable oil counts as Biofuel (for which the 2,500L exemption applies) and others claiming not.
Certainly, if you actually make your own proper Biodiesel then you are exempt. I am going to attempt this myself soon. Pouring veg oil straight in to the tank is still a grey area. It may or may not be exempt from fuel duty, but I have always wondered about VAT, since veg oil is VAT-free as a food but not, I guess, as a fuel.
A requirement of the exemption is that you keep basic records for 6 years. They should detail the amount produced and the date. I do this, so if I do get pulled over in a roadside check (unlikely), and if they do see my usage of SVO being illegal (even less likely), I can hopefully only pay back what I actually owe.
Some people declared to customs that they were putting pure veg oil straight in to their tanks, and were paying duty. When the exemption came in, they were told that they no longer had to pay duty. It does seem that C&E, at least in some areas, count pure veg oil as Biofuel.
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What is Biodiesel? Quoted directly from the tinyurl link I posted above (where you may find the pagination/formatting easier to follow:
2.1 What do you mean by Biodiesel, Bioblend, Bioethanol and Bioethanol blend?
The law describes 'Biodiesel' as a diesel quality liquid fuel that is produced from biomass or waste cooking oil:
the ester content of which is not less than 96.5% by weight; and
the sulphur content of which does not exceed 0.005% by weight, or is nil.
'Bioblend' means any mixture that is produced by mixing:
Biodiesel; and
heavy oil that has not been charged with the excise duty on hydrocarbon oil.
'Bioethanol' means a liquid fuel:
consisting of ethanol produced from biomass; and
capable of being used for the same purposes as light oil.
'Bioethanol blend' means any mixture that is produced by mixing:
bioethanol; and
hydrocarbon oil not charged with excise duty.
3.1 What rates of duty apply to biofuels?
At the time of publishing, Biodiesel and Bioethanol have an excise duty rate of 20 pence per litre less than the sulphur-free diesel/sulphur-free petrol rates. However in order to qualify for these lower rates these products must be shown to fully meet the relevant fiscal definitions as described in Section 2.1 of this Notice.
The responsibility for this rests with the producer who must carry out sufficient tests to show that the specifications are met. We may also carry out sample tests as part of our audit programme.
If the product does not meet the appropriate definition it will be considered a fuel substitute and will attract a higher rate of duty. See sub-paragraph 3.1.1 for more information.
For example, in order to be Biodiesel, a product must meet all of the following criteria:
It must be of 'Diesel quality' ? see paragraph 3.3 below; and
It must be a liquid ? not gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars; and
It must be made from biomass or waste cooking oil;
The total ester content must not be less than 96.5% by weight; and
The sulphur content must not exceed 0.005% by weight or be nil.
3.1.1 Duty rates for fuel substitutes
Fuel substitutes pay the rate of duty applicable to the type of engine they are designed for use in. For example, a product designed for use in a diesel engine will attract the sulphur-free diesel rate. With fuel substitutes, the duty rate is applied to the whole non-hydrocarbon oil content of the liquid. So, if a duty paid fuel substitute is added to another fuel substitute which is not duty paid, duty is due under Section 6A of HODA on that part of the mixture that has not already been charged with duty under that section.
top ^3.2 What is Biomass?
'Biomass' is described in HODA as meaning the biodegradable fraction of products, wastes and residues from agriculture, forestry and related activities as well as the biodegradable fractions of industrial and municipal waste.
This does not include mineral oils.
3.2.1 Any organic matter that is available on a renewable or recurring basis qualifies as biomass. For example:
Dedicated energy crops and trees;
Agricultural food and feed crop residues;
Waste vegetable and animal substances;
Wood, wood wastes and residues;
Aquatic plants;
Grasses;
Residues;
Fibres;
Animal wastes;
Municipal wastes and other materials.
top ^3.3 What does 'diesel quality' mean?
The law (HODA s.2AA (2)(a)) says 'diesel quality' means capable of being used for the same purposes as heavy oil.
Revenue & Customs consider that 'diesel quality' means that biodiesel will run, in a blend with ordinary diesel, an engine that would normally run on diesel. Biodiesel does not have to be used exclusively in the fuel tank, although this is possible.
Most vehicles require a blend of biodiesel (approx. 5%) and ordinary diesel (approx 95%) to meet manufacturers' specifications.
top ^3.4 Dual fuel tanks
Some vehicles have dual tanks, one containing diesel and the other a biofuel product. The engine is started using diesel, before switching to the biofuel. In these circumstances, the product in the biofuel tank must still meet all the conditions of the biodiesel fiscal definition. If it does not meet all these conditions then the fuel in the second tank will be considered to be a fuel substitute and duty will be due at the appropriate rate ? (see paragraph 3.1.1).
top ^3.5 Can I use Straight Vegetable Oil (SVO) or Used Cooking Oil (UCO) to produce Biodiesel?
Yes. However, the fuel that is produced from SVO and UCO must meet all the conditions of the fiscal specification before qualifying for the lower rate of duty.
If Revenue & Customs suspect, either through lack of supporting evidence, or due to other information, that the product does not meet the specification, they may take representative samples for testing (see regulations 10 and 11 of Biofuels and Other Fuel Substitutes (Payment of Excise Duties etc) Regulations 2004).
Producers can provide evidence by having an independent test, which addresses all aspects of the specification. In the case of smaller producers who are not supplying the product commercially, evidence can be given by providing a full description of the recipe and method used to manufacture the product and evidence that this is the recipe and method consistently used.
Important Note: The following paragraph has the force of law.
Under the powers given by Regulation 6 of the Revenue and Traders (Accounts and Records) Regulations 1992 Revenue & Customs require that details of recipes used to produce biodiesel are kept and preserved for six years. This requirement also applies to supporting documents showing that the recipe is followed for each batch produced and to the preservation of any test results linked to particular batches.
The recipe should confirm that the biofuel has been made using ingredients that will result in a fuel that meets the biodiesel specification. In simple terms this excludes the use of ingredients such as white spirit or other hydrocarbons such as kerosene in the production process
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It must be of 'Diesel quality' ? see paragraph 3.3 below; and
It must be a liquid ? not gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars; and
It must be made from biomass or waste cooking oil;
The total ester content must not be less than 96.5% by weight; and
The sulphur content must not exceed 0.005% by weight or be nil.
Does anyone know if new clean SVO meets these criteria with no modification?
What's ester?
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Initially there was talk of getting samples of oil tested to prove the ester and sulphur content. See letters from KTC Edibles and Cargills:
snipurl.com/1p9x9
It sounds like pure 100% rapeseed oil meets the relevant criteria due to the way it is processed.
Feedback from HMRC in this thread seems to give the green light to using it.
snipurl.com/1p9xi
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FRom HMRC
"If the fuel substitute is straight vegetable oil or as listed in section 2.2 of Public Notice 179E then it does not have to meet the specifications for biodiesel as described in the notice. Please see below further details of the Bio-fuels Simplification."
As the following user pointed out this is very badly worded - other notices, say for example
3.5 Can I use Straight Vegetable Oil (SVO) or Used Cooking Oil (UCO) to produce Biodiesel?
Yes. However, the fuel that is produced from SVO and UCO must meet all the conditions of the fiscal specification before qualifying for the lower rate of duty.
3.1 What rates of duty apply to biofuels?
At the time of publishing, Biodiesel and Bioethanol have an excise duty rate of 20 pence per litre less than the sulphur-free diesel/sulphur-free petrol rates. However in order to qualify for these lower rates these products must be shown to fully meet the relevant fiscal definitions as described in Section 2.1 of this Notice.
The responsibility for this rests with the producer who must carry out sufficient tests to show that the specifications are met. We may also carry out sample tests as part of our audit programme.
If the product does not meet the appropriate definition it will be considered a fuel substitute and will attract a higher rate of duty. See sub-paragraph 3.1.1 for more information.
**********
That particular letter from Emmerson is not clarifying that the SVO must meet the specifications, to be duty exempt. In fact it is almost saying the complete opposite. Why can't they just say it in plain language what we can use to qualify for the 2500 litre rule!
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It must be of 'Diesel quality' ? YES IT PASSES THAT
It must be a liquid ? not gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars YES BY A HUGE MARGIN
It must be made from biomass or waste cooking oil; YES - NATURALLY
The total ester content must not be less than 96.5% by weight; YES [1]
The sulphur content must not exceed 0.005% by weight or be nil YES IT PASSES THIS
Does anyone know if new clean SVO meets these criteria with no modification?
[1] www.bio-power.co.uk/svoa/conf.htm
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