Purpose
The Product Stewardship for Oil Program commenced on 1 January 2001. The program’s objectives are to:
-
provide economic incentives to increase the uptake and encourage appropriate recycling and use of used oil
-
encourage the environmentally sustainable management and re-refining of used oil, and its re-use
-
support economic recycling options for used oil.
The program aims to develop different forms of recycling and a diverse range of products and markets for recycled oil to ensure the long-term viability of the used oil recycling industry in Australia.
Operation
The Product Stewardship for Oil Program consists of an economic incentives package (a levy/benefit scheme).
The product stewardship oil levy was introduced on 1 January 2001. It is currently set at 5.449 cents per litre of lubricant oil produced or sold in Australia. The levy applies to both domestic and imported oils and is paid by oil producers and importers. Exported oil is not levied. The levy is collected as an excise by the Australian Taxation Office and as customs duty by the Australian Customs and Border Protection Service.
While the levy is intended to offset the cost of benefits paid under the Product Stewardship for Oil Program, it is not directly connected to benefit payments.
Product stewardship benefits are paid to recyclers as a volume-based incentive to encourage increased oil recycling. Benefits are provided at different rates depending on the type of product. The lowest benefits are provided for basic burner fuels and the highest for full recycling into as-new, re-refined base oil. Table 1 shows the 2010–11 benefit rates.
Benefit rates do not directly reflect the comparative effort involved in recycling or the environmental benefit achieved. Rates were set by determining the amount of incentive required for industry to undertake and increase each form of recycling. Some forms of recycling require more incentive than others.
Benefits were paid to 24 recyclers during 2010–11.
Table 1: Product stewardship benefit rates in 2010–11
Category
|
Product
|
Benefit (cents per litre)
|
1
|
Re-refined base oil (for use as a lubricant or as hydraulic or transformer oil) that meets the prescribed criteria1.
|
50
|
2
|
Other re-refined base oils (for example, chain bar oil).
|
10
|
3
|
Diesel fuels that comply with the Fuel Standard (Automotive Diesel) Determination 2001, as they are enforced.
|
7
|
4
|
Diesel extenders:
(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.
|
5
|
5
|
High-grade industrial burning oils (filtered, de-watered and de-mineralised).
|
5
|
6
|
Low-grade industrial burning oils (filtered and de-watered).
|
3
|
7
|
Industrial process oils and process lubricants, including hydraulic and transformer oils (re-processed or filtered, but not re-refined).
|
0
|
8
|
Gazetted oil, consumed in Australia for a gazetted use.
|
5.449
|
1 The Product Stewardship (Oil) Regulations 2000 specify a health, safety and environmental standard for re-refined lubricants. The basic requirement of this standard is to produce a non-carcinogenic and non-toxic product.
Compliance
The Australian Taxation Office audit program from previous years continued, with two audits completed in 2010–11.
Reporting
Information provided for this annual report is prepared in accordance with section 35 of the Product Stewardship (Oil) Act 2000 and covers the operation of the PSO Act and the Product Stewardship for Oil Program from 1 July 2010 to 30 June 2011.
Product stewardship levy
In 2010–11, total revenue collected from the product stewardship levy was $32.0 million, comprising $22.3 million in excise collections on domestic production and $9.8 million in customs duty on imported oils. An amount of $2.5 million was paid back to clients in the form of drawbacks (for export) and refunds, bringing the balance of revenue from the levy to $29.5 million.
Levy collections are recorded against a number of categories based on the type of oil. Customs duty is recorded under international customs classifications. Tables 2 and 3 show excise and customs tariff collections by category for 2010–11.
Product stewardship benefits
A total of $34.9 million was paid as product stewardship benefits in 2010–11, with $32.7 million paid to recyclers for recycling used oil.6 This represents an increase of $0.7 million in benefits for recycling when compared to 2009–10.
The volume of recycled oil on which benefits were paid in 2010–11 was 269 million litres, compared to 267 million litres in 2009–10. Figure 1 shows the annual volume of used oil recycled since the program began.
Table 2: Product stewardship levy collection (excise) by category
Item number
|
Category
|
Levy collected ($)
|
15.1
|
Lubricant base oils.
|
19 769 291
|
15.2
|
Lubricant base oils (recycled).
|
2 076 271
|
15.3
|
Petroleum-based greases and their synthetic equivalents.
|
409 621
|
Total_____22_255_182'>Total
|
|
22 255 182
|
Table 3: Product stewardship levy collection (customs tariff) by category
Item number
|
Category
|
Levy collected ($)
|
27101991
|
Petroleum-based oils including lubricants, hydraulic fluids and transformer oils
|
6 048 807
|
27101992
|
Petroleum-based greases
|
517 672
|
27109191
|
Petroleum-based oils including lubricants, hydraulic fluids and transformer oils
|
22 516
|
27109192
|
Petroleum-based greases
|
5 289
|
27109991
|
Petroleum-based oils including lubricants, hydraulic fluids and transformer oils
|
108 331
|
27109992
|
Petroleum-based greases
|
26 144
|
34031110
|
Preparations for the treatment of textiles, containing petroleum oils, solid
|
1 828
|
34031190
|
Preparations for the treatment of textiles, containing petroleum oils, liquid
|
3 425
|
34031910
|
Other preparations (for example, cutting oil, anti-corrosion) containing petroleum oils, solid
|
84 318
|
34031990
|
Other preparations (for example, cutting oil, anti-corrosion) containing petroleum oils, liquid
|
495 860
|
34039110
|
Preparations for the treatment of textiles, not containing petroleum oils, solid
|
4 504
|
34039190
|
Preparations for the treatment of textiles, not containing petroleum oils, liquid
|
9 113
|
34039910
|
Other preparations (for example, cutting oil, anti-corrosion) not containing petroleum oils, solid
|
106 930
|
34039990
|
Other preparations (for example, cutting oil, anti-corrosion) not containing petroleum oils, liquid
|
359 117
|
38112110
|
Additives for lubricating oil, containing petroleum oils, solid
|
79 555
|
38112190
|
Additives for lubricating oil, containing petroleum oils, liquid
|
1 798 794
|
38190000
|
Hydraulic brake fluids
|
108 499
|
|
Total
|
9 780 701
|
Figure 1: Annual volume of oil recycled since the Product Stewardship for Oil Program began
Note: The pre-Product Stewardship for Oil Program value is an industry estimate. Program benefits commenced in January 2001, therefore the 2000–01 value was derived from data covering only six months.
Figure 2: Annual volume of recycled oil in each category since the Product Stewardship for Oil Program began
Note: Volumes reported for categories 2 and 4 are too small to chart. Category 8 and the additional benefit do not contribute to the overall volume of used oil recycled. Program benefits commenced in January 2001, therefore the 2000–01 value was derived from data covering only six months.
Figure 2 shows the annual volume of used oil claimed in each category since the program began. Table 4 provides a breakdown by product category for 2010–11, indicating volumes recycled and benefit payments.
The volume of recycled oil claimed in category one in 2010–11 increased by 3.0 million litres over the 2009–10 volume. The volume claimed in category 5 increased by 2.2 million litres, while the volume in category 6 decreased by 4.2 million litres.
Table 4: Product stewardship benefit payments by category in 2010–11
Category
|
Benefit payments ($)
|
Litres
|
1
|
Re-refined base oil (for use as a lubricant or a hydraulic or transformer oil) that meets the specified criteria
|
23 137 028
|
46 274 056
|
2
|
Other re-refined base oils (for example, chain bar oil)
|
105 555
|
1 085 553
|
3
|
Diesel fuels that comply with the Fuel Standard (Automotive Diesel) Determination 2001, as they are enforced
|
nil
|
nil
|
4
|
Diesel extenders:
(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
|
nil
|
nil
|
5
|
High grade industrial burning oils (filtered, de-watered and de-mineralised)
|
6 999 700
|
139 994 009
|
6
|
Low grade industrial burning oils (filtered and de-watered)
|
2 462 383
|
82 079 444
|
7
|
Industrial process oils and lubricants, including hydraulic and transformer oils (re-processed or filtered, but not re-refined)
|
nil
|
nil
|
8
|
Gazetted oil consumed in Australia, for a gazetted use
|
2 202 328
|
40 417 106
|
Total volume of recycled oil (excludes category 81)
|
|
269 433 062
|
Total benefit payments
|
34 909 995
|
|
1 Benefits paid under category 8 do not contribute to the overall volume of recycled oil.
Financial information
The department’s 2010–11 operating costs for the Product Stewardship for Oil Program, including staff salaries and allowances, consultancies, advertising and other related expenses, were $170 724.
The Australian Taxation Office’s operating costs for the program were $194 448. Services provided by the Australian Taxation Office include processing registrations and claims for benefits, compliance monitoring and client liaison.
Committees
The Oil Stewardship Advisory Council provides advice to the minister on the product stewardship mechanisms and their operation, the oil recycling and oil production industries, and on markets for recycled used oil products. Part 3 of the PSO Act establishes the council. Members of the council are appointed on the basis of their relevant knowledge and experience, or as Australian Government representatives (see Table 5). The appointments of all members expired on 29 August 2010 and no appointments or reappointments have been made since then. The council held one meeting in 2010–11, on 19 July 2010.
Table 5: Membership of the Oil Stewardship Advisory Council until 29 August 2010
Member
|
Area of knowledge or experience
|
Mr Mike Williamson
Chair
|
Broad waste management issues, from a business perspective
|
Mr Paul Barrett
|
Oil production
|
Mr Mark Borlace
|
National consumer issues
|
Mr Harold Grundell
|
Used oil recycling
|
Mr Peter Harding
|
Representing the Commissioner of Taxation
|
Mr Paul Howlett
|
Non-government sector
|
Mr Gary O’Connor
|
State or territory government
|
Ms Kelly Pearce
|
Representing the Department of the Sustainability, Environment, Water, Population and Communities
|
Mr Bob Pullinger
|
Used oil recycling
|
Mr Tim Rose
|
Used oil recycling
|
Operation of the Fuel Quality Standards Act 2000
The Fuel Quality Standards Act 2000 (FQS Act) is the legislative basis for national fuel quality and fuel quality information standards for Australia. The FQS Act regulates the quality of fuel supplied in Australia and ensures that, where appropriate, information about fuel is provided where the fuel is supplied.
Fuel quality standards exist for petrol, automotive diesel, biodiesel and liquefied petroleum gas (autogas). A fuel information standard exists for ethanol, when blended with petrol.
The FQS Act sets out criminal and civil penalties for non-compliance with Australian fuel quality standards. The department’s monitoring, compliance and enforcement team takes fuel samples for testing against the appropriate standard and investigators take any necessary enforcement action.
The Fuel Standards Consultative Committee is an advisory body to the minister on fuel matters. The committee is established under the FQS Act and the minister appoints members from each state and territory, the Commonwealth, and various organisations with interests in fuel production and supply, vehicle manufacturing, consumer concerns and environmental protection.
When a state or territory has fuel quality standards in place, the Commonwealth standards operate concurrently. State or territory standards apply when they regulate a fuel characteristic not covered by the Commonwealth standards.
The minister may vary fuel standards on a short-term basis and for longer periods after consultation with the committee.
The minister must keep a Register of Prohibited Fuel Additives. There are currently no entries on the register.
Under the FQS Act, fuel suppliers must keep appropriate records and provide annual statements to the department.
Fuel pump.
Purpose
The purpose of the FQS Act is to regulate the quality of fuel in Australia to:
-
reduce the level of pollutants and emissions arising from the use of fuel that may cause environmental and health problems
-
facilitate the adoption of better engine and emission control technology and allow for more effective operation of engines
-
ensure that appropriate information about fuel is provided when it is supplied to the public.
The Fuel Quality Standards Regulations 2001 (FQS Regulations) cover the regulation of fuel and fuel additives; the operations of the FSCC; the publication of notices about entries in the Register of Prohibited Fuel Additives; enforcement, and record keeping and reporting obligations.
Operation
Fuel quality standards
Fuel Quality Standard Determinations set specific standards for petrol, automotive diesel, biodiesel and autogas. The determinations specify standards for a range of parameters, which address both environmental and operational performance.
The review of the Fuel Standard (Autogas) Determination 2003 progressed during 2010–11, after submissions were made on the public discussion paper in January 2010.
Amendments to the Fuel Quality Standards Act 2000
The department is pursuing a series of amendments to the FQS Regulations to support the amendments to the FQS Act and respond to emerging trends in the fuel industry with fuel blends. The amendments to the FQS Regulations are expected to be finalised in the second half of 2011.
The next statutory review of the FQS Act is due to begin in the second half of 2011.
Compliance and enforcement
The Australian Government runs a fuel sampling program to monitor the quality of fuels sold in Australia. Fuel samples of all grades of fuel covered by the standards are taken throughout the fuel supply chain in all states and territories. The monitoring program takes representative samples in each of the fuel markets around Australia, and uses information obtained from consumers about poor quality fuel.
Fuel sampling is undertaken at distribution terminals, depots, service stations and other outlets. Samples are screened for compliance with the standards and if required, are further tested at an independent laboratory accredited by the National Association of Testing Authorities. Testing methods are accredited to international standards.
During 2010–11 the department’s fuel quality inspectors tested 2 983 petrol, diesel, biodiesel and autogas samples from 623 sites across Australia. A total of 207 fuel quality compliance incident reports were received from consumers. In comparison, 3 302 samples were taken during 2009–10 from 865 sites, and 264 compliance incidents were reported.
Test results indicate a high level of compliance with the fuel standards. Where non-compliance is detected, further compliance action, ranging from education to prosecution, is undertaken.
On 25 May 2011 the Federal Court ordered that Fullport Pty Ltd only supply diesel with a flashpoint greater than 61.5°C. The order was made for two years and the company was required to pay costs.
On 18 May 2011 the EG Khoury Group Pty Ltd gave an undertaking to the Federal Court, on a without admission basis, that it will only supply diesel fuel that meets the diesel standard. The undertaking is for two years and the company was required to pay costs.
Audits of the terms and conditions of approvals to vary fuel standards under section 13 of the FQS Act are also conducted by fuel quality inspectors. During 2010–11, 15 audits were completed. The results indicate a generally high level of compliance.
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