Citation, commencement and effect

1.-(1) These Regulations may be cited as the Hydrocarbon Oil Duties (Reliefs for Electricity Generation) (Amendments for Carbon Price Support) Regulations 2015 and come into force on 1st April 2015.

(2) They have effect in relation to qualifying oil or qualifying bioblend used in a combined heat and power station in Great Britain on or after that date.

Amendments to the Hydrocarbon Oil Duties (Reliefs for Electricity Generation) Regulations 2005

2.  The Hydrocarbon Oil Duties (Reliefs for Electricity Generation) Regulations 2005(2) are amended as follows.

3.  In regulation 9 (application and interpretation of part 4), in paragraph (2)-

(a)after "Part" insert "and Schedule 3";

(b)before the definition of "CHPQA" insert-

"(ba)"CHP Qualifying Heat Output", "CHP Qualifying Power Output", "CHP Total Fuel Input" and "CHP Total Power Output" have the meaning given in section 4 of the CHPQA;";

(c)for the definition of "CHPQA" substitute-

"(c)"CHPQA" refers to the Combined Heat and Power Quality Assurance Standard, Issue 5 (November 2013), prepared by the Department of Energy and Climate Change ("the CHPQA Standard");";

(d)after the definition of "CHPQA certificate" insert-

"(da)"non-qualifying electricity" means electricity to which paragraph 24B(2A) of Schedule 6 to the Finance Act 2000(3) does not apply;

(db)"qualifying electricity" means electricity to which paragraph 24B(2A) of Schedule 6 to the Finance Act 2000 applies.".

4.  In regulation 10 (amount of relief)-

(a)in paragraph (1), for "paragraph (4)" substitute "paragraphs (4) and (7)";

(b)after paragraph (3) insert-

"(3A) Paragraphs (4) and (5) apply to qualifying oil or qualifying bioblend used to produce outputs of the station before 1st April 2015.";

(c)after paragraph (5) insert-

"(6) Paragraphs (7) and (8) apply to qualifying oil or qualifying bioblend used to produce outputs of the station on or after 1st April 2015.

(7) Where a quantity of the qualifying oil or qualifying bioblend used to produce outputs of the station is referable to the production of non-qualifying electricity in the relevant annual operation, the amount of relief allowed under paragraphs (1) and (2) is the amount of duty that has been charged and paid on the quantity that is so referable less the relevant amount specified in Schedule 2 (carbon price support rates).

(8) For the purposes of paragraph (7), the quantity of qualifying oil or qualifying bioblend that is referable to the production of non-qualifying electricity is such quantity as is determined in accordance with Schedule 3.".

5.  After Schedule 2 insert-

Regulation 10(8)

"SCHEDULE 3FUELS REFERABLE TO THE PRODUCTION OF NON-QUALIFYING ELECTRICTY IN A COMBINED HEAT AND POWER STATION

1.  The extent to which a quantity of qualifying oil or qualifying bioblend ("input fuels") is referable to the production of non-qualifying electricity in a combined heat and power station is to be determined in accordance with paragraphs 2 to 5.

2.  Calculate the total quantity of input fuels referable to the production of electricity in accordance with the following formula-

3.  Calculate the total quantity of input fuels referable to the production of non–qualifying electricity in accordance with the following formula-

4.  Calculate the percentage of input fuels referable to the production of non-qualifying electricity in accordance with the following formula-

5.  Apply the percentage calculated in accordance with paragraph 3 to the quantity of input fuels used to generate outputs of the station.".

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Hydrocarbon Oil Duties (Reliefs for Electricity Generation) Regulations 2005 (S.I. 2005/3320) ("the principal Regulations").

The principal Regulations provide for a relief from excise duty for rebated oils and bioblends used to generate electricity ("input fuels"). Except in the case of a claim for relief for input fuels used to generate electricity in a generating station, or the outputs of a combined heat and power station, situated in Northern Ireland, the amount of relief is reduced by the carbon price support rates specified in Schedule 2 of the principal Regulations.

These Regulations amend the principal Regulations so that, in relation to input fuels used to generate the outputs of a combined heat and power station on or after 1st April 2015, the carbon price support rates specified in Schedule 2 only apply to input fuels that are referable to the production of non-qualifying electricity. "Non-qualifying electricity" is electricity to which paragraph 24B(2A) of Schedule 6 to the Finance Act 2000 (c.17) does not apply.

Regulation 5 inserts a new Schedule 3 into the principal Regulations to provide the method for determining the quantity of input fuels that are referable to the production of non-qualifying electricity.

A Tax Information and Impact Note (TIIN) covering this instrument was published on 10th December 2014 alongside draft clauses of the Finance Bill 2015 and this instrument and is available on the Government website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.