When a blend is no longer considered fuel

Working out what is no longer fuel

Some blends containing fuel components are no longer considered to be fuel and are not subject to excise duty. For example, oil-based paint. However, it may not be so clear for other blends.

Under section 95–5 of the Fuel Tax Act 2006 (Fuel Tax Act), we may decide that certain blends of fuel are not a fuel for the purposes of the Act.

We have determined that a blend is not fuel if the blend is not marketed or sold for use as fuel in an internal combustion engine, and the blend either:

• contains biodiesel classified to tariff sub-item 10.21 and has a minimum concentration of either  
  • 5% by volume of surfactant, or
  • 2% by volume of oleic acid
   
• is a fuel classified to tariff sub-items 10.25, 10.26, 10.27, 10.28 and has either  
  • a product listed in Table 1 below at a concentration equal to or greater than the specified minimum, or
  • more than one product listed in Table 1 below and the total concentration of those products is equal to or exceeds 10% by volume.
   

Blends that satisfy the requirements of EXC 2016/5 Fuel Tax (Fuel Blends) Determination 2016 (No 1) are also not a fuel blend for excise purposes.

Non-fuel components

See the following tables for the minimum concentration of non-fuel product and how we deal with blends under the determination.

Table 1: Non-fuel components

Product	Minimum concentration % volume / volume
Tertiary butyl alcohol	0.5
Other alcohols (other than methanol, ethanol and isopropyl alcohol)	10.0
Ketones	10.0
Methyl tertiary butyl ether	1.0
Di-isopropyl ether	1.0
Other ethers	10.0
Esters	10.0
Surfactants	1.0
Silicone oils	2.0
Oleic acid	2.0
Water	5.0

Table 2: Examples of blends under the determination

Blend	Is it a fuel under the Fuel Tax Act?
90% toluene with 10% volume / volume ketone	No
90% toluene with 8% volume / volume ketone and 2% volume / volume esters	No
92% toluene with 4% volume / volume ketone and 4% volume / volume esters	Yes

For more information, see Excise on fuel and petroleum products.

Excise obligations

If excise duty has been paid on all the excisable components of the blend, and the resulting blend is not excisable, you will have no further excise liability or excise obligations.

However, if an entity (including you or your supplier) is entitled to a fuel tax credit on any of the components of the blend, then the blending is excise manufacture. You will have excise obligations.

How to determine which fuel blends are not considered fuel and are not subject to excise duty.