The Product Stewardship for Oil (PSO) Scheme pays incentives to industry. These incentives encourage the management and re-refining of used and recycled oil. This reduces environmental and human health risks from improperly disposed oil.
The framework and incentives paid are set under the Product Stewardship (Oil) Act 2000. The PSO is a levy-based system. It imposes a duty on oil-based lubricants. The levy funds benefits that are paid to used oil recyclers. These benefits are paid through the Australian Taxation Office (ATO). From 1 July 2023 the levy will rise from 8.5 cents to 14.2 cents per litre, or per kilo for greases.
Recycling benefits are designed to increase collection and reprocessing of used oil. This reduces the environmental risks posed by used lubricating oil. It also ensures a long-term future for oil recycling in Australia.
The Benefit rates are shown in Table 1.
|1. Re-refined base oil (for use as a lubricant or a hydraulic or transformer oil) that meets the specified criteria||50|
|2. Other re-refined base-oils (eg chain bar oil, oils incorporated into manufactured products)||10|
|3. Diesel fuels that comply with the Fuel Standard (Automotive Diesel) Determination 2001, as in force from time to time||7|
|4. Diesel extenders:
|5. High grade industrial burning oils (filtered, de-watered and de-mineralised)||5|
|6. Low grade industrial burning oils (filtered and de-watered)||3|
|7. Industrial process oils and lubricants, including hydraulic and transformer oils (reprocessed or filtered, but not re-refined)||0|
|8. Gazetted oil consumed in Australia for a gazetted use||8.5|
Some of these categories are no longer being claimed. This is because of changed industry practice or interactions with other legislations. Benefits currently being claimed are for categories 1, 2, 5 and 8.
The rate of benefit varies for each category of recycled product. This matches the level of incentive required each product. The higher rate for Category 1 reflects the value of the full re-refining of used oil. Note that products in categories 1 and 2 are liable for the levy when they enter the market again.
To claim benefits a business needs to register with the Australian Taxation Office.
The scheme was introduced in 2001 to increase the amount of used oil recycled in Australia. Since then, the amount of oil that Australia collects and recycles has risen from none to over 320 megalitres of base lubricating oil every year. That’s more than half the oil sold in Australia each year. Or equivalent to 160 Olympic size swimming pools.
The following legislation underpins the Product Stewardship for Oil scheme:
- The Product Stewardship (Oil) Act 2000 establishes the framework of the scheme.
- The Product Grants and Benefits Administration Act establishes eligibility criteria and the administrative mechanisms used by the ATO to pay benefits to recyclers.
Relevant regulations are:
- The Product Stewardship (Oil) Regulations 2022 provides rates of benefits and standards for each category of recycled oil.
- The Product Stewardship (Oil) Declaration 2022 sets out the gazetted oils that can be used and the gazetted uses to which they can be put, to claim a Category 8 benefit.
These acts set out the rate of the levy, list exempt oils and abolish the automatic indexation on the levy.
Deloitte Access Economics Australia has completed the fourth independent review of the Product Stewardship (Oil) Act 2000. The report was tabled in Parliament on 10 August 2021 along with the Australian Government’s response.
The review found that the Product Stewardship for Oil Scheme is achieving the objects of the legislation to:
- provide a product stewardship arrangement for used oils
- ensure environmentally sustainable management, refining and reuse of used oil
- support economic recycling options for used oil.
The government will consult with industry and other stakeholders on the review’s findings and recommendation.
Statistics showing volumes and payments for Product Stewardship Oil benefits and levies in recent financial years are now available.
Here are links to documents relation to the early days of the Product Stewardship for Oil (PSO) scheme. They do not necessarily reflect on how the scheme now operates.
- Australian Government response to the third independent review of the Product Stewardship (Oil) Act 2000 - 2016
- Third independent review of the Product Stewardship (Oil) Act 2000 - 2013
- Second independent review of the Product Stewardship (Oil) Act 2000 - 2009
- Independent review of the Product Stewardship (Oil) Act 2000 - May 2004
- Independent review of the transitional assistance element of the Product Stewardship for Oil (PSO) Program - March 2004