Using rebated fuels in vehicles and machines (Excise Notice 75)

Find out when you can use rebated diesel, biodiesel or kerosene in vehicles and other machinery.

It tells you when you can use rebated diesel, biodiesel or kerosene in vehicles and other machinery.

Diesel (also known as gas oil or DERV) is normally liable to the full rate of excise duty.

There are circumstances where a particular vehicle or machine may be able to use fuel taxed at a reduced (rebated) rate of excise duty. This is because of the type of vehicle or machine, and the purpose it’s being used for.

Rebated rate of excise duty is sometimes known as:

Biodiesel and hydrotreated vegetable oil (HVO) are diesel quality fuels derived from biomass. HVO is treated the same as heavy oil under the Hydrocarbon Oil Duties Act 1979, and both of these fuels are liable to the same excise duty rates as diesel.

They can also be supplied at a reduced duty rate for the same uses as diesel, if all the requirements that apply to diesel are applied. They must be marked and can only be supplied by a registered dealer in controlled oils (RDCO). HVO can be fully rebated for heating use only if it has been both:

For this notice, references to using red diesel include using rebated:

Kerosene is a heavy oil that may also benefit from a fully rebated rate. Rebated kerosene must also be marked and can be used only for generating heat for use in or on premises.

Kerosene bioblend (produced by mixing kerosene and biodiesel) also benefits from a fully rebated rate if it is intended to be used for generating heat.  

Bioblend means a fuel produced by mixing biodiesel with heavy oil that has not yet been charged with fuel duty. Mixing biodiesel with heavy oil, such as diesel or kerosene, after the duty point does not produce bioblend. For example, rebated biodiesel cannot be mixed with rebated kerosene and used for commercial heating.