I have not held discussions on this issue with the Chancellor of the Exchequer, but officials in my Department are in regular contact with officials in HM Revenue and Customs on this issue
Jane Kennedy
Speaking in response to a parliamentary question on Tuesday (October 21), Ms Kennedy said that, as there were legal obligations to handle hazardous waste responsibly, and fuel had a high value, she did not envisage the duty- which will see recycled oil taxed the same as virgin heavy fuel oil – would have a negative affect on collections.
And, she claimed the 9.29 pence per litre duty would help discourage the combustion of waste oil, in keeping with the European Waste Oil Directive.
She said: “It is the view of the Government that the duty regime applicable to waste derived fuel oil from 1 November 2008 should have no adverse effects on the volume of waste oil collected, as correct management of hazardous waste is a legal requirement. Waste oil has a value and there will continue to a demand for waste-derived fuel.
“A higher rate for waste-derived fuel could also encourage the provision of regeneration of waste oil in preference to combustion”, she added.
Ms Kennedy's comments came following a question from Colin Challen, MP for Morley and Rothwell, who asked what discussions she had had with the Treasury as to whether the rate of duty to be applied to waste-derived fuel oil was consistent with Government obligations to encourage the recycling and reuse of waste under the newly-approved Waste Framework Directive.
Ms Kennedy explained that, as a specific measure applying to waste oil, the Waste Oil Directive took precedence over the Waste Framework Directive and required member states to take measures to give priority to the regeneration of waste oil above combustion.
She added: “I have not held discussions on this issue with the Chancellor of the Exchequer, but officials in my Department are in regular contact with officials in HM Revenue and Customs on this issue.”
OSS
Ms Kennedy's parliamentary answer follows increasing concern across the UK that the introduction of the recycled fuel-oil levy could go as far as to ‘kill oil recycling'.
Merseyside-based oil recycling firm OSS Group, which refines waste lubricating oil into Clean Fuel Oil (CFO) which would be subject to the levy, has been very vocal in its opposition to the proposed charge.
After raising initial concerns in August (see letsrecycle.com story) it last week intensified its calls for the Government to either reduce or re-think the levy – claiming the support of a number of MPs, lawyers and environmental experts.
Andy McNair, managing director of OSS, said: “We have presented evidence supported by environmental experts and MPs to the Government but they refuse to listen. The market for recycled fuel oil will die if this rejection of recycling goes ahead.”
“From a Government that professes to care about the environment and be forward thinking, it is a blunt put-down to the voters who believed in what they said. They seemingly refuse to accept the evidence and more importantly, the views of people both within and outside the industry. This is a simple message to us all – ‘we don't care about recycling waste lubricating oil which by the way is hazardous waste. Do what you want with it',” he added.
‘Contradictory'
Nationwide chartered accounts UHY Hacker Young has also blasted the proposals as putting the UK duty at seven times the EU minimum duty rate which is currently around 1.2 pence per litre.
Roy Maugham, Tax Partner at UHY Hacker Young, said: “The Government seems to be taking a contradictory approach towards encouraging environmentally responsible behaviour by levying the new duty on recycling fuel oil at a much higher rate than they need to.”
The company – which has 16 offices across England – is also aware of the impact it could have in removing the incentive for companies to use recycled fuel oil as heating fuel or off-road engine fuel and make it harder for the UK to dispose of the 800,000 tonnes of the oil produced annually.
Mr Maugham said: “Companies who recycle waste oil could be deterred from investing in new fuel recycling technology as the excise duty and the additional red tape created by having to register as an approved oil producer hits their profits.”
Protocol
Continuing on the topic of oil recycling, Ms Kennedy explained the status of the proposed Quality Protocol for the production and use of processed fuel oil (PFO) from waste lubricating oil (WLO)(see letsrecycle.com story), which closed for public consultation on Monday (October 20).
She said: “It is anticipated that a post-consultation draft of the protocol will be submitted to the European Commission in January 2009 for notification as a technical regulation in accordance with the Technical Standards Directive.”
“Subject to no substantial difficulties arising from this notification, the final protocol will then be published in August 2009,” she added.
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