Eligibility

You must meet certain requirements for the relevant category before you can claim a benefit under the product stewardship for oil (PSO) program.

Category 1

To claim the PSO benefit for category 1 you must:

• be licensed to manufacture excisable products
• be registered for PSO
• comply with Australian, state or territory legislation relating to oil recycling operations or enterprises
• have recycled the oil you are claiming for, and have either  
  • sold the recycled oil to another entity and it is not to undergo further recycling before being sold to the end user, or
  • used the recycled oil in your business operations.

The recycled oil needs to be suitable for use as a lubricant, hydraulic or transformer oil but does not need to be used or sold for this use.

An additional 12 cents per litre of product stewardship (oil) benefit is payable in respect of Category 1 re-refined base oil for entitlements between 1 July 2020 and 31 December 2020.

To be eligible for Category 1 benefits, the recycled oil (that is suitable for use as a lubricant, hydraulic or transformer oil) must meet the:

• definition of a re-refined base oilExternal Link – which requires the used oil to be restored to the condition of a base oil by either thin film evaporation, or vacuum distillation; followed by either solvent extraction or hydro-finishing
• quality criteriaExternal Link in Schedule 1 of the Product Stewardship (Oil) Regulations 2000 (Regulations).

You can also use an alternative process approved by the Minister for the Environment. This process should be similar in purpose and effect to the processes above.

You should submit your alternative process in writing to the Minister for the Environment for approval.

Further information can be found on the website of the Department of Agriculture, Water and the Environment by accessing Used oil recyclingExternal Link.

Sample testing for category 1

To meet the quality criteria for category 1 claims, an independent laboratory must test an oil sample against the criteria in Schedule 1 of the Regulations.

Test results must be submitted with the first claim and at intervals of no more than six months while the benefit is claimed.

Recyclers making claims under PSO category 1 must submit the following statements from the laboratories involved in sampling and testing:

• a statement from independent laboratory extracting the sample
• if a different entity, a statement from independent laboratory undertaking the testing of the samples.

Independent laboratory means a laboratory that:

• is independent of the person making the claim for PSO benefit
• operates at arm's length from the person
• has appropriate facilities, resources and expertise to conduct the necessary tests.

Statement from independent laboratory taking samples

Sample takers may provide any form of statement that includes words to the effect of:

• the sample is representative of a production run of the 're-refined base oil'
• the sample taker is satisfied that the sample was not tampered with after it was collected and before it was dispatched to the laboratory undertaking testing.

Statement from independent laboratory testing samples

Laboratories may provide any form of statement with words to the effect that the sample was not tampered with after receipt by the laboratory and before testing.

The statement must be signed and dated by an authorised representative of the independent laboratory, who must also clearly print their name, position and organisation on the statement.

Further information can be found at:

• Schedule 1External Link of the Product Stewardship (Oil) Regulations 2000
• ATO ID 2008/84 PSO: accredited laboratory and appropriate facilities, resources and expertise
• ATO ID 2008/85 PSO: non accredited laboratory and appropriate facilities, resources and expertise
• ATO ID 2014/35 PSO: entitlement for a PSO benefit under category 1 where re-refined base oil is not used or sold for use as a lubricant or a hydraulic or transformer oil.

Category 2

To claim PSO benefits for category 2, you must:

• be licensed to manufacture excisable products
• be registered for PSO
• comply with relevant Australian, state or territory legislation for oil recycling operations or enterprises
• have recycled the oil you are claiming for, and have either
  • sold the recycled oil to another entity and it is not to undergo further recycling before being sold to the end user
  • used the recycled oil in your business operations.

For category 2 benefits, the recycled oil must meet the definition of a re-refined base oilExternal Link.

This requires the used oil to be restored to the condition of a base oil by thin film evaporation, or vacuum distillation; followed by either solvent extraction or hydrofinishing.

Alternatively, you can use a process approved by the Minister for the Environment. This process should be similar in purpose and effect to the processes mentioned above.

You should submit your alternative process in writing to the Minister for the Environment for approval.

There is no requirement under category 2 for the re-refined base oil to be suitable for use as a lubricant, hydraulic or transformer oil or to meet the requirements of Schedule 1 of the Regulations.

Categories 3–5

To claim any of the PSO benefits for categories 3, 4 or 5, you must:

• be licensed to manufacture excisable product
• be registered for PSO
• comply with relevant Australian, state or territory legislation relating to oil recycling operations or enterprises
• have recycled the oil you are claiming for, and have either
  • sold the recycled oil to another entity and it is not to undergo further recycling before being sold to the end user
  • used the recycled oil in your business operations.

In addition, for each of those categories the following requirements must be satisfied:

• Category 3 – recycled oil must comply with the current, relevant fuel standard below.
• Category 4 – recycled oil must be filtered, de-watered and de-mineralised and if combined with diesel the resulting blend must comply with the current, relevant fuel standard below.
• Category 5 – recycled oil must be filtered, de-watered and de-mineralised and be suitable for use as a high-grade industrial burner oil. Note: the recycled oil is not required to be used or sold for use as a high-grade industrial burner fuel.

More information:

• The determination of Fuel Quality Standards is available on the Federal Register of Legislation under:
  • Fuel Quality standards (Automotive Diesel) Determination 2019 (legislation.gov.au)External Link
• PGBR 2012/1 Product Stewardship (Oil) Benefit: the meaning of the expression 'goods produced from used oil' and the terms 'filtered', 'de-watered', and 'de-mineralised' for the purposes of the Product stewardship for oil benefit scheme
• ATO ID 2008/38 PSO: entitlement for a PSO benefit where category 5 oil is not used as a burner fuel
• ATO ID 2008/74 PSO: complying with relevant Commonwealth, State and Territory legislation.

Category 6

There is no benefit payable under category 6 as a result of a decision handed down by the Administrative Appeals Tribunal in 2013.

See also

Further details of the decision can be found by accessing Cooper Bros Holding Decision Impact Statement

Category 7

You can claim for category 7 but the benefit amount is nil.

See also

Each PSO of recycled oil has its own benefit Rates.

Category 8

You must be registered to claim PSO benefits for category 8.

It is not the intent of the PSO program to capture oils that are incorporated into products or end-uses that do not produce a recyclable waste oil stream and present a low risk to the environment.

As a result, if you use gazetted (eligible) oil in a gazetted (eligible) use in Australia, you may be able to claim a category 8 benefit. However, there is no entitlement to a PSO benefit under category 8 to the person who uses the resulting product after the oil has been incorporated into it.

Gazetted oils generally:

• can't be recycled
• are considered a low risk to the environment.

Gazetted oils must be declared by the Minister and are listed in the Product Stewardship (Oil) Declaration 2003 (see Table 2).

If you're unsure whether you have purchased gazetted oil you should contact your supplier for information on its specifications and composition.

Table 2: Gazetted oils and uses

Gazetted oil	Gazetted use
Naphthenic process oil	Incorporated in: a de-dusting composition for insulating material a de-watering flocculant composition a mould release composition an adhesive an ammonium nitrate fuel oil explosive an ink, varnish or resin for printing a paint de-foamer. a rock drilling composition, or a rubber compound
Paraffinic process oil	Incorporated in: a de-dusting composition for insulating material a de-watering flocculant composition a mould release composition an adhesive an agricultural spray an anti-bloat composition an ammonium nitrate fuel oil explosive an ink, varnish or resin for printing a personal care product a rock drilling composition, or a rubber compound.
Paraffinic (C14-17) process oil	Incorporated in a medium chain chlorinated hydrocarbon by a chlorination process.
Petroleum jelly	Incorporated in an ink, varnish or resin for printing.
Polyisobutylene succinic anhydride (PIBSA)	Incorporated in an explosive composition.
Vegetable-derived polyethers	Incorporated in a textile fibre lubricant.
White mineral oil	Incorporated in a personal care product.

Exemptions to the PSO levy are further set in the Product Stewardship (Oil) Declaration 2003 (see Table 2)

Before you can make a claim, you must meet the requirements of the relevant benefit categories under the PSO program.