Biodiesel information

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Biodiesel & UK tax / excise
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Products & Services   Disclaimer : The following information is based on H.M. Customs & Excise information notices. The following information should be regarded as an interpretation of these notices. Biofuel Systems accept no responsibility for any errors, inaccuracies, omissions or any other inconsistencies of the following information. Anyone wishing to use, produce or sell biodiesel in the UK, or elsewhere, is solely responsible for their actions and must ensure that all relevant laws and regulations are obeyed.   Biodiesel process
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Contact Information   Excise and Inland Customs Advice Centre : For information and copies of information notices contact 0845 0109000   Biodiesel & uk excise
Links     ATEX
    The laws concerned:    
  • Hydrocarbon Oil Duties Act 1979
  • Hydrocarbon Oil (Payment of Rebates) Regulations 1996
  • Customs and Excise Management Act 1979
  • EC Statutory Instrument
  • Financial Bill / Budget

Biodiesel : Biodiesel does not appear to have been recognised as a form of fuel until Budget 2002. The rate of excise duty for biodiesel produced from used cooking oil is £0.20 per litre less than the rate of duty for Ultra Low Sulphur Diesel (ULSD). In Budget 2008 it was announced that the duty differential of £0.20 per litre for biofuels for road use would cease from 1st April 2010. Thereafter excise duty will be charged at the same rate as main road fuels. A relief scheme was introduced on 1st April 2010 to maintain the duty differential of £0.20 per litre for biodiesel produced from waste cooking oil. This scheme is set to run for a period of 2 years. See below and links to HMRC website.

Fiscal definition
  Biodiesel must meet all of the following criteria to meet the fiscal definition:

  • Must be "diesel quality" - i.e. capable of being used for the same purposes as heavy oil and being able to run an engine that would normally run on diesel - either in a blend with ordinary diesel or where biodiesel is used exclusively
  • Must be liquid - not gaseous - at a temperature of 15°C and under a pressure of 1013.25 millibars
  • Must be made from biomass or waste cooking oil
  • The total ester content must not be less than 96.5% by weight
  • The sulphur content must not exceed 0.005% by weight (or be nil)
UK duty rates
  Current excise duty rate per litre (£)  
Biodiesel - road use   0.5795  
Bioethanol - road use   0.5795  
Biodiesel - non-road use   0.1114  
    (Information given in table above is correct for period from 1st January 2012 until 31st July 2012)  
  • Biodiesel is liable for VAT
  • Biodiesel producers in the UK (that produce over 2500 litres per year of biodiesel) must register with HMRC and complete form EX103. Records must be kept, and returns submitted using form HO930. Producers of less than 2500 litres per year of biodiesel are classed as "exempt producers" but are still expected by HMRC to keep production records. See - HMRC Notice 179E
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