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HMRC internal manual

Biofuels and Fuel Substitutes Assurance

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HM Revenue & Customs
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Biodiesel and bioblend - production, storage and delivery: biodiesel production - additives

Biodiesel production - additives

If any substance is added as part of the production process, the finished product willonly be eligible for the biodiesel duty rate if it meets the fiscal definition.

NB The use of any mineral (hydrocarbon) oil additives during the production process is likely to result in a finished product that does not fully meet the fiscal definition for biodiesel. These additives have no ester value and if a higher proportion than 3.5% is used, the fuel will not meet the fiscal specification. (See also ‘diesel quality’ HCOBIG10500 ).

If a mineral (hydrocarbon) oil additive, which has not been charged with excise duty, is added to the finished biodiesel the resulting product will be dutiable as a bioblend.

Some producers mix small quantities of tied oils, such as turpentine, dipentene and limonene, in their biofuel:

  • If these oils are supplied as additives in motor fuel they are outside the tied oil scheme and should have duty charged on them at the fuel substitute rate
  • If they have been supplied without duty being charged, the proportion used in the production of biofuel should be accounted for at the biodiesel rate if the finished fuel meets the fiscal specification