Operation of the Product Stewardship (Oil) Act 2000
Section 35 of the Product Stewardship (Oil) Act 2000 requires the Minister to prepare an annual report about the operation of the product stewardship arrangements for oil (including the Act). This section meets this reporting requirement for 2015–16.
The Act underpins the Product Stewardship for Oil Program. Its objects are to:
develop a product stewardship arrangement for used oil
The program provides economic incentives for the environmentally sustainable management, re-refining and re-use of used oil. A levy on oil sales helps fund the cost of recycling used oil. The Department has policy responsibility for the program, but it is administered by the Australian Taxation Office. The Treasurer sets the levy rate under separate legislation.
On 1 July 2014, the Treasurer increased the product stewardship oil levy to 8.5 cents per litre of lubricant or equivalent oil. The levy applies to both domestically produced and imported oil. The levy is collected as an excise by the Australian Taxation Office and as customs duty by the Australian Customs and Border Protection Service. Exported oil is not levied.
The Australian Taxation Office pays product stewardship benefits to recyclers as a volume based incentive to encourage increased oil recycling. Benefits apply at different rates depending on the type of oil. The lowest are provided for burner fuels and the highest are provided for full recycling into as-new, re-refined base oil.
Product stewardship for oil levy
In 2015–16, the Australian Taxation Office and the Department of Immigration and Border Protection collected total revenue from the product stewardship for oil levy of $45,711,948, made up of $29,302,381 in excise paid on domestic production and $16,409,567 in customs duty on imported oils. This was a change of -13 per cent and -5.4 per cent respectively, from the previous year. An amount of $3,688,122 was paid back to clients in the form of drawbacks (for export) and refunds. The net revenue from the levy for 2015–16 was $42,023,826.
Product stewardship benefits
In 2015–16, the Australian Taxation Office paid $62,717,540 as product stewardship (oil) benefits to 27 recyclers, representing 275,311,684 litres of recycled oil. Table 5.29 shows benefit payments by category.
(a) that are filtered, de-watered and de-mineralised
(b) that, if combined with diesel fuels, would produce a combined fuel that complies with the determination mentioned in category 3
High-grade industrial burning oils (filtered, de-watered and de-mineralised)
Low-grade industrial burning oils (filtered and
Industrial process oils and lubricants, including hydraulic and transformer oils (re-processed or filtered, but not re-refined)
regulations under section 10 (working out the amount of product stewardship benefits)
the state of the oil production and oil recycling industries
other matters specified by the Minister.
The Act provides that the Minister appoints members to the council based on their knowledge and experience. The Minister must ensure that the council includes both a representative of the Commonwealth and a representative of the Commissioner of Taxation.
The Australian Government intends to amend the Act to abolish the council. The Department will consult experts and industry on oil product stewardship matters.