My original query ran:
I was asked to email you after phoning HMRC's advice line, as they
were unable to answer my query.
I am looking to run a road vehicle on processed waste lubricant oil.
The oil will be processed mainly by various forms of filtration, and
blended with normal "pump" diesel before being used in the vehicle.
The vehicle's engine and fuel system would be suitably adapted for
burning the blended fuel, chiefly by increased filtration, and the
addition of a heat exchanger to warm the oil to decrease its viscosity
prior to its supply to the engine. The vehicle would have twin fuel
tanks, with a changeover system, as the engine would still need to be
started on normal diesel.
The fuel used does not meet HMRC's normal heavy oil specifications -
if used in an un-adapted vehicle, it would lead to poor performance,
and probable engine failure.
The fuel does not meet HMRC's definition of an alternative fuel
either, as the oil waste used is predominantly hydrocarbon.
I anticipate the production and use of the oil to be on a fairly small
scale - probably no more than HMRC's limit for unregistered vegetable
oil processors of 2500L a year.
I realise I am probably required to pay the duty on the waste oil
which is used. What I have been unable to find, despite searching your
website, is what I am required to do to register, in order to pay the
duty. I would be grateful if you could let me know:
1) If I need to pay duty, and at what rate
2) How to register, and what records and information I need to keep
I am aware that there may be other requirements imposed by
environmental legislation, and that I will need to make various
applications for the handling of waste materials, but those
requirements I will be querying with the relevant other government
To which they have finally replyed with:
Dear Mr Eastwood
Thank you for your email enquiry dated 1st June 2009 relating to the proposed use of processed waste lubricating oil as fuel for a road vehicle.
Any oil used as motor fuel must, under EU and UK law, bear excise duty and the specific duty rate charged would depend on the exact type of fuel (and the type of motor it is intended for) These factors would also determine the type of HMRC approval/registration required by you.
However you do need to be aware that you might be in breach of environmental legislation if you collected and transported quantities of such waste oil from various sources, and also if you then applied any type of process to this waste oil. The finished product then used in a motor vehicle would possibly fail to meet EU and UK specifications on the exact content of sulphur and toxic heavy metals or other substances in it. I would strongly advise you to research and deal with these issues first before embarking on this project. I say this because such waste oil is normally considered only fit for burning as furnace fuel due to the heavy metal contamination and it is normally not cost-effective to reprocess it into motor fuel of an acceptable standard, even with the sophisticated methods available in oil refineries and the consequent economies of high volume.
Additionally, from an HMRC perspective the Hydrocarbon Oil (Marking) Regulations 2002 prohibit the sale of ‘dark oil’ as fuel for a heavy oil vehicle and lubricating oil might well fall within the dark oil specification (at Section 2(1) of the Regulations)
Therefore before I advise as to the appropriate mechanism for paying any duty due I believe that the above questions need to be resolved.
I apologise for the somewhat vague nature of this reply but hope this is of some assistance.
I must emphasise that the advice given is based on the information you supplied. If the nature of the transaction changes in technical detail, or the relevant details provided were incomplete or incorrect, we will not be bound by this advice.
Although it his reply makes things sound bad, I think its still likely I can end up running on the stuff. The Dark Oil bit is a red herring, as that only applies to the sale of oil - for the purposes of this excerse, I am neither buying or selling any oil, merely using my own waste oil in my own vehicle, but it is only the sale of such oil which is prohibited. This also probably lets me off a lot of the enviromental regs as well. I'm still trying to find out where the rules are for the quality of motor fuel - I wouldn't be supprised to find that the legislation there only talks about oil being sold.
I'll post an update if I get anywhere.
In other news, the trip to darkest Wales is very much on, I'm hitting the road straight after work to collect the engine that is being fitted as part of an OLLR hit squad action in Betws-y-coed on Saturday.