Issue
Is the use of diesel fuel to power a reefer's generator, whilst the reefer is sitting on a wharf awaiting transportation or following transportation, 'use in marine transport' for the purposes of section 36 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. The use of diesel fuel to power a reefer's generator, whilst the reefer is sitting on a wharf awaiting transportation or following transportation is not 'use in marine transport' for the purposes of section 36 of the EGCSA.
Facts
An entity purchase diesel fuel which they place in a 'reefer'.
A reefer is a refrigerated container that ordinarily uses diesel fuel from its own tank to power the reefer's refrigeration plant. The reefer's refrigeration plant must be kept running at all times to ensure that the contents of the reefer are kept at the required temperature.
A reefer is placed on the entity's vessel and transported between two places by sea.
Prior to being loaded onto the vessel, the reefer may remain on a wharf for variable periods of time. Once the vessel arrives at its destination, the reefer is unloaded from the vessel, but may remain on the wharf for a period of time prior to being transported to its ultimate destination.
Reasons for Decision
Subsection 53(1) of the EGCSA provides that an entity is, subject to certain conditions, entitled to an off-road credit if they purchase diesel fuel for a use by them that qualifies. Under subsection 53(3) of the EGCSA, 'use in marine transport' is a use that qualifies.
Section 36 of the EGCSA sets out the meaning of the expression 'use in marine transport', which includes various uses. All of the uses covered by section 36 require the fuel to be used 'in a vessel' or 'in equipment in or on a vessel.'
In this instance, the reefer is sitting on the wharf, either awaiting loading onto the vessel or following its unloading from the vessel. At neither time is the reefer actually on the vessel and therefore the use of diesel fuel to chill the reefer cannot be considered to be 'use in equipment in or on a vessel.'
Accordingly, the use of diesel fuel to power a reefer's generator, whilst the reefer is sitting on a wharf awaiting transportation or following transportation, is not 'use in marine transport' as defined in section 36 of the EGCSA.