Mixing messages

Some worrying information about the legal implications or mixing your own bio diesel on site as a transport operator have been recently highlighted by the Australian Trucking Association’s weekly newsletter, The Friday Facts.

Transport companies are advised not to buy B100, 100% pure bio diesel, but instead to buy it at a 99% blend in order to avoid being classified as a fuel manufacturer by the tax authorities. If B100 is added to a tank containing any other fuel, the process is regarded as fuel blending and requires the operator to hold an excise manufacturer licence.

The ATA also recommends operators consider the benefits of buying bio diesel blends that comply with the diesel fuel standard, if they do this can be claimed under the fuel tax credit scheme for the entire amount of the blended fuel used.

It is also a good idea, if blending your own bio diesel, to get a testing certificate from the fuel supplier to confirm your blend complies with these rules. Apparently, the tax office can ask you to provide the certificate if you are claiming the fuel tax credits.

All of these issues illustrate the legislative minefield that is the world of alternative fuels. Operators and legislators alike have to keep a careful balance between doing the best for the environment and productivity while at the same time maintaining fuel quality.

Both the big fuel companies plus the truck manufacturers have a critical interest in the government legislating firmly on fuel quality in Australia. For the fuel companies it is a matter of making money by value adding on to their product creating blends for the transport of industry. The truck manufacturers can see major technical and warranty issues ahead without strict fuel quality control in the area of alternative fuels.

The view from the transport operators side is complete the different. Years of very high price hikes have squeezed margins and put pressure on every aspect of the transport business. The prospect of being able to control costs to a small degree by buying in the fuels and blending them to suit their own purposes is very attractive in any transport operation.

The Australian Tax Office, in their usual manner, have discovered a way of making life difficult for someone who takes their own initiative. The fact the move also protects the overinflated profits of the big oil companies is purely coincidental.