Used Oil Recycling

Product Stewardship Levy (excise)

• Product stewardship levy (excise)
• Levy (excise) exemptions

Product stewardship levy

The product stewardship levy is payable by oil producers and importers for petroleum-based oils and their synthetic equivalents. The levy currently stands at 5.449 cents per litre (or kilogram for greases).

The levy offsets the costs of benefits paid to oil recyclers as an incentive to undertake increased recycling of used oil. This ensures that some of the costs of used oil recycling are borne by the markets that gain the benefit from the production and use of that oil, rather than from public monies or other markets. In economic terms, it 'internalises the externalities'

No oil is levied twice, no 'eligible' lubricant escapes the levy, imported and domestically-produced oils are treated equitably (to the extent possible), and exported oil is not levied. Levied oil, which is incorporated into products that are subsequently exported, may be subject to drawback arrangements. For further information on duty drawback contact the Australian Taxation Office on 1300 657 162.

Questions relating to whether a particular product attracts the PSO levy should be directed to the Australian Taxation Office on 1300 657 162, where the levy is paid under the Excise Tariff legislation (oil produced in Australia), or to the Australian Customs Service, Classification Area on (02) 6275 6497, where the levy is paid under the Customs Tariff legislations (oil imported to Australia).

Exemptions from the product stewardship levy

It was not the original intent of the Product Stewardship for Oil Program to capture oils that are incorporated into products or end-uses that do not produce a recyclable waste oil stream and present a low risk to the environment.

Exemptions for single-use oils such as food grade white oil, polygylcol brake fluids and aromatic process oils came into effect on 15 April 2002. These products have characteristics that are distinguishable from other oil products, and as such, they are able to be clearly defined as exempt under the Excise Tariff Amendment Act (No. 1) 2002 and the Customs Tariff Amendment Act (No. 2) 2002.

Providing exemptions for multi-use oils has required a different approach, as both the oil and its use need to be specified in order to ensure the exemption is applied appropriately.

On 1 December 2003, the Product Stewardship (Oil) Legislation Amendment Act (No. 1) 2003 commenced. This allows exemptions for specific uses of oil that do not create a recyclable waste stream and pose a low risk to the environment.

Under these legislation amendments, a category of benefit payment (to be known as category 8 benefit) is paid, at the same rate as the levy which is currently 5.449 cents per litre, for uses of oil as approved by the Minister for the Environment and Heritage by Commonwealth Gazette notice. The category 8 benefit claims may be backdated to 27 March 2003.

To apply for registration for a category 8 benefit payment, or find out whether a specific oil and end use is eligible, call the Australian Taxation Office on 1300 657 162. For further information contact the Department of the Environment, Water, Heritage and the Arts on 1800 982 006, or email oilrecycling@environment.gov.au.

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