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Excise on recycled petroleum products

Understand your excise obligations if you manufacture, deliver, store or move recycled petroleum products.

Last updated 14 May 2023

Recycled petroleum products

Recycled petroleum products are derived through a recycling, manufacturing or other process from used or waste liquid hydrocarbons. These products include burner fuels recycled from waste oil, recovered diesel and petrol.

We use the term ‘recycled’ when there's been manufacture or production of a product that's either:

  • new or different
  • has a distinctive character or use.

When you need a licence, and to lodge and pay

To manufacture, store, deliver or move recycled petroleum products subject to excise, you must:

You may receive a benefit for the recycling of waste oil under the Product stewardship for oil program (PSO). The excise duty rates depend on how much you process the oil and the end product of your recycling activity.

Excise rate for industrial burner fuel

If you recycle petroleum products into an industrial burner fuel, you classify the fuel product under tariff sub-item 10.28. The fuel is subject to the same rate of excise duty as petrol and diesel.

Reusing used oil is not excisable

We don't consider it excise manufacture if you only filter and de-water used oil so it can be reused. This is because there has been no manufacture or production of something new or different (to the used oil) with a distinctive character or use.

Although re-used oil may be used as a burner fuel, you:

  • don't pay excise duty
  • don't need an excise licence
  • aren't entitled to a PSO benefit or fuel tax credits.

See our Rulings for more details:

  • ER 2012/1 Excise: the meaning of the expression 'manufactured or produced' for the purposes of the Excise Acts
  • PGBR 2012/1 Product Stewardship (Oil) Benefit: the meaning of the expression 'goods produced from used oil' and the terms 'filtered', 'de-watered', and 'de-mineralised' for the purposes of the Product stewardship for oil benefit scheme.

Waste oil contract collectors

We don't require contractors who collect waste oil and deliver it to your premises to hold an excise licence or pay excise duty on the waste oil.