Issue
May more than one provisional entitlement arise under subsection 5(1) of the Energy Grants (Cleaner Fuels) Scheme Act 2004 (EGCFSA) for a quantity of fuel which is both a biodiesel blend and ultra low sulphur diesel (ULSD)?
Decision
Yes. More than one provisional entitlement may arise under subsection 5(1) of the EGCFSA for a quantity of fuel which is both a biodiesel blend and ULSD.
Facts
An entity is registered for cleaner fuels grants under the Product Grants and Benefits Administration Act 2000 (PGBAA).
The entity manufactured a quantity of biodiesel, and manufactured a quantity of diesel fuel. The diesel fuel met the definition of an ultra low sulphur diesel (ULSD) for the purposes of the Energy Grants (Cleaner Fuels) Scheme Regulations 2004 (EGCFS Regulations). The entity blended these fuels to make a biodiesel blend.
The blended fuel met the definition of a 'biodiesel blend' and ULSD for the purposes of the EGCFS Regulations.
Reasons for Decision
The term 'cleaner fuel' is defined in subsection 4(1) of the EGCFSA and includes fuels that are prescribed in the EGCFS Regulations. A biodiesel blend and ULSD are both prescribed in the EGCFSA Regulations as a cleaner fuel.
To be eligible for a grant an entity is required, among other things, to be provisionally entitled to a grant for the fuel. Subsection 5(1) of the EGCFSA sets out the criteria that must be met to give rise to a provisional entitlement, and includes at paragraph 5(1)(f) of the EGCFSA the requirement that the fuel is a cleaner fuel at the qualifying time.
In determining if two provisional entitlements may arise for a single quantity of fuel, it is relevant to consider the wording of section 2A of the EGCFSA, which sets out the objects of the EGCFSA. Paragraphs 2A(a) and 2A(b) of the EGCFSA states that the scheme is intended to provide grants to offset the duty payable on certain fuels (including biodiesel). This can be contrasted with paragraph 2A(c) of the EGCFSA which states that the scheme is intended to provide grants to encourage the manufacture and importations of low sulphur fuels. By allowing two provisional entitlements for a single quantity of fuel - one for the fuel as a biodiesel blend and a second for the fuel as ULSD - the dual objectives of paragraph 2A are satisfied.
A further factor in support of the notion that more than one grant may be payable in respect of a single quantity of fuel is that there are no provisions in the EGCFS (or in the PGBAA under which the payment of cleaner fuels grants is administered) that prevents more than one grant being paid on a quantity of fuel if the fuel meets the definition of two types of cleaner fuel.
In conclusion, where a quantity of fuel is both a biodiesel blend, and ULSD, more than one provisional entitlement to a cleaner fuel grant may arise.