Ethanol Production Grant and Concessional Excise Treatment of Biodiesel
A key component of the current support for alternative fuels is the concessional excise treatment. Alternative fuels are currently not subject to fuel tax (for example, LPG and other gaseous fuels) or are effectively excise free (for example, ethanol and biodiesel).
This is made possible via excise offsetting grants under the Ethanol Production Grant (EPG) and Cleaner Fuels Grants (CFGP) for ethanol and biodiesel respectively and the excise free status for gaseous fuels.
The Australian Tax Office administers the biodiesel production grants through the Cleaner Fuels Grants Program and AusIndustry administers the ethanol production grants through the Ethanol Production Grant Program.
Alternative fuels were scheduled to begin incurring fuel tax from 1 July 2011 under a policy announced by the previous government. As indicated in a press release by the Treasurer and Assistant Treasurer on 13 May 2008 , the Government has not yet reached a decision on the taxation of alternative fuels beyond 2011.
The post-2011 fuel excise arrangements for alternative fuels fall within the terms of reference of the Review of Australia’s Future Tax System announced by the Treasurer in the 2008-09 Budget that will provide a final report to the Government by the end of 2009.
Anyone can make a submission to the review up until 1 May 2009. For more information on the review, including how you can access the consultation papers and participate, please visit www.taxreview.treasury.gov.au or call 1800 614 133.