Issue
Does a cleaner fuel 'comply with the applicable fuel standard for such fuel' for the purposes of the definition of 'cleaner fuel' in section 4 of the Energy Grants (Cleaner Fuels) Scheme Act 2004 (EGCFS Act), if an approval that varies a fuel standard in a specified way in respect of specified supplies of that fuel is granted to a person under the Fuel Quality Standards Act 2000 (FQSA) and the fuel supplied by that person (or another person specified in the approval) complies with that fuel standard as varied?
Decision
Yes. A cleaner fuel complies 'with the applicable fuel standard for such fuel' for the purposes of the definition of a cleaner fuel in section 4 of the EGCFS Act if an approval that varies a fuel standard in a specified way in respect of specified supplies of that fuel is granted under section 13 of the FQSA, and: • the fuel supplied is subject to the approval; • the fuel supplied complies with the fuel standard as varied by the approval; and • the conditions specified in the approval are met.
Facts
An entity manufactured a quantity of fuel that is a biodiesel.
The Minister administering the FQSA has granted to the entity an approval in writing varying the fuel standard for biodiesel as set out in the Fuel Standard (Biodiesel) Determination 2003. The approval was granted under section 13 of the FQSA.
The biodiesel complied with the standard for biodiesel as varied by the approval.
The approval was subject to the following conditions: • the fuel, subject to the approval, was to be supplied between specified months • the fuel was to be supplied by persons specified in the approval.
The conditions specified in the approval were met.
Reasons for Decision
The definition of each of the specified cleaner fuels in section 4 of the EGCFS Act includes the requirement that the fuel 'complies with the applicable fuel standard for such fuel'.
Section 4 of the EGCFS Act gives the definition of 'fuel standard' as a fuel standard made under the FQSA. The wording of the definition creates a nexus between the term 'fuel standard' for the purposes of the EGCFS Act and a fuel standard for the purposes of the FQSA. Therefore, the phrase 'the applicable fuel standard' is a reference to a fuel standard that is made under the FQSA.
Section 3 of the FQSA states that the objects of the Act are to regulate the quality of fuel supplied in Australia and to ensure that, where appropriate, information about fuel is provided when the fuel is supplied. To this end, the Minister administering the FQSA has made several determinations under section 21 of the FSQA that set out the fuel standards for particular fuels including the Fuel Standard (Biodiesel) Determination 2003 that sets out the fuel standard for biodiesel.
The Minister administering the FQSA may also, under section 13 of the FQSA, grant an approval to a person that varies a fuel standard in a specified way in respect of specified supplies of the fuel by the person or any other person specified in the approval. The Minister has granted a number of such approvals. A Notice of such approval is published in the Commonwealth of Australia Gazette.
The phrase 'the applicable fuel standard' for the purposes of the definition of each cleaner fuel in section 4 of the EGCFS Act is a reference to a fuel standard made under the FQSA for the fuel and therefore includes a fuel standard as varied under an approval granted under section 13 of the FQSA in relation to specified supplies of the fuel by the person or persons specified in the approval.
Therefore, a cleaner fuel will comply with 'the applicable fuel standard' for the purposes of the EGCFS Act where, the Minister administering the FQSA, grants under section 13 of the FQSA: • an approval in writing to a person varying a fuel standard in a specified way in respect of specified supplies of that fuel; and • the fuel supplied, that is subject to the approval, meets the fuel standard as varied by the approval; and • the conditions specified in the approval are met. Note: Regulation 3 of the Energy Grants (Cleaner Fuels) Scheme Regulations 2004 includes in the definition of a biodiesel blend the requirement that the diesel component of the fuel complies with 'the applicable fuel standard for automotive diesel'. Diesel will meet the applicable fuel standard for automotive diesel where an approval that varies the fuel standard for automotive diesel is granted and the diesel complies with the fuel standard as varied by the approval and the conditions specified in the approval are met.