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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
EXCISE TARIFF AMENDMENT (ETHANOL AND BIODIESEL) BILL 2015
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendment to be moved on behalf of the Government
(Circulated by the authority of the
Treasurer, the Hon J. B. Hockey MP)
Table of contents
Glossary .................................................................................................. 5
General outline and financial impact ....................................................... 7
Amendment to the Excise Tariff Amendment (Ethanol and
Biodiesel) Bill 2015 ....................................................... 9
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
Bill Excise Tariff Amendment (Ethanol and
Biodiesel) Bill 2015
EGCFS 2004 Energy Grants (Cleaner Fuels) Scheme
Act 2004
5
General outline and financial impact
Amendment to the Excise Tariff Amendment (Ethanol and
Biodiesel) Bill 2015
The amendment to the Excise Tariff Amendment (Ethanol and Biodiesel)
Bill 2015 ensures that excise duty on biodiesel:
• is imposed at the same excise duty rate as fuel ethanol in the
period 1 July 2015 until 30 June 2021; and
• then increases in equal amounts over a ten year period until
reaching a final rate of 50 per cent of the diesel rate in the
2030-31 financial year and later financial years.
Date of effect: The amendment applies from 1 July 2016.
Proposal announced: The amendment has not previously been
announced.
Financial impact: The amendment will have a cost to revenue of
$6.5 million over the forward estimates period comprising:
2015-16 2016-17 2017-18 2018-19
- -$1m -$2.5m -$3m
Human rights implications: See Statement of Compatibility with Human
Rights at the end of the chapter.
Compliance cost impact: The amendment imposes some transitional
compliance costs as a result of the phasing in of excise duty rates until
1 July 2030.
7
Amendment to the Excise Tariff
Amendment (Ethanol and Biodiesel)
Bill 2015
Outline of chapter
1.1 The amendment to the Excise Tariff Amendment (Ethanol and
Biodiesel) Bill 2015 (the Bill) ensures that the excise duty on biodiesel:
• is imposed at the same excise duty rate as fuel ethanol in the
period from 1 July 2015 until 30 June 2021; and
• then increases in equal amounts over a ten year period until
reaching a final rate of 50 per cent of the diesel rate in the
2030-31 financial year and later financial years.
Detailed explanation of new law
Amendment - Excise duty on biodiesel
Biodiesel excise duty
1.2 The rate of excise and excise-equivalent customs duty that
currently applies to biodiesel under the Excise Tariff Act 1921 and
Customs Tariff Act 1995 is the same as the rate of excise and
excise-equivalent customs duty that applies to petrol and diesel.
Australian manufacturers and importers of biodiesel into Australia are
entitled to claim a grant under the Energy Grants (Cleaner Fuels) Scheme
Act 2004 (EGCFS 2004) equal to the amount of duty payable.
Revised transition period for biodiesel excise duty
1.3 The Bill, as introduced, would repeal the entitlement for grants
for biodiesel under the EGCFS 2004 from 1 July 2015 and revise the rate
of excise duty that applies from 1 July 2015 to zero, increasing
progressively to 50 per cent of the diesel excise rate for the 2020-21
financial year and later financial years.
1.4 The amendment changes the period over which biodiesel excise
duty transitions to a final rate of 50 per cent of the diesel excise rate. The
amendment ensures that the excise duty on biodiesel:
9
Amendments to the Excise Tariff Amendment (Ethanol and Biodiesel) Bill 2015
• is imposed at the same excise duty rate as fuel ethanol in the
period from 1 July 2015 until 30 June 2021; and
• then increases by equal amounts over a ten year period until
reaching a final rate of 50 per cent of the diesel rate for the
2030-31 financial year and later financial years.
1.5 The rates of excise duty for biodiesel that apply under the
amendment are as follows:
Table 1.1 Biodiesel excise rates aligned with fuel ethanol until
30 June 2021
Year# 2016-17 2017-18 2018-19 2019-20 2020-21
% 6.554 13.108 19.662 26.216 32.770
rate*
# the excise duty rate for the financial year 2015-16 remains unchanged (nil rate)
consistent with the Bill as introduced.
* percentage of diesel excise duty rate.
Table 1.2 Biodiesel excise rates transition to 50 per cent of diesel rate
from 1 July 2021 until 1 July 2030
Year 2021- 2022- 2023- 2024- 2025- 2026- 2027- 2028- 2029- 2030-
22 23 24 25 26 27 28 29 30 31
% 34.493 36.216 37.939 39.662 41.385 43.108 44.831 46.554 48.277 50
rate*
* percentage of diesel excise duty rate
1.6 The amendment applies to the excise duty rate imposed on
biodiesel from 1 July 2016. The rate of duty on biodiesel for the 2015-16
financial year (nil) applies in accordance with the Bill as introduced.
1.7 The amendment does not change the rate of duty for fuel ethanol
that applies under the Bill as introduced.
10
Amendment to the Excise Tariff Amendment (Ethanol and Biodiesel) Bill 2015
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Amendment to the Excise Tariff Amendment (Ethanol and Biodiesel)
Bill 2015
1.8 The amendment to the Excise Tariff Amendment (Ethanol and
Biodiesel) Bill 2015 is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3
of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
1.9 The amendment to the Excise Tariff Amendment (Ethanol and
Biodiesel) Bill 2015 provides a longer period (16 years) over which the
excise duty rate that applies to biodiesel transitions to a final rate of 50 per
cent of the excise rate that applies to diesel.
1.10 Under the amendment the excise duty on biodiesel:
• is imposed at the same excise duty rate as fuel ethanol in the
period from 1 July 2015 until 30 June 2021; and
• then increases in equal amounts over a ten year period until
reaching a final rate of 50 per cent of the diesel rate in the
2030-31 financial year and later financial years.
Human rights implications
1.11 The amendment to this Bill does not engage any of the
applicable rights or freedoms.
Conclusion
1.12 The amendment to this Bill is compatible with human rights as it
does not raise any human rights issues.
11
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