The end of “chip fat” motoring?
Thrifty motorists who have tried out cooking oils in place of increasingly expensive fuel should be aware of the new fuel duty regulations which are about to levy fuel excise duty on the process.
Use of alternative oils as fuel generally requires some “processing” on the part of the motorist before the oil is fit for use. If the oil is “waste heavy” (which usually means it has been used before, for example as “chip fat”) then motorists planning to process and use it as fuel need to register their “production premises” and become approved as oil producers by 1 November 2008. From this point, the processing will be defined as “production”, and excise duty will be levied at the fuel oil rate (50.35p at the time of writing) upon use of the product as either heating fuel or engine fuel (any type of engine).
As a rough guide, processing oil for use as fuel usually includes activities such as the application of heat, vibration, pressure or the addition of chemicals. Basic filtration or gravity separation without the processing activities will still count as oil production, but producers who only carry out these basic processes to not need to register.
Applications to register the production premises should be made on form EX103 (or EX103A for incorporated companies). The process will include a pre-registration visit.