Explanatory note

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.

The CHPQA Standard referred to in the amendment made by regulation 3(c) is available on the government website at https://www.gov.uk/combined-heat-power-quality-assurance-programme or can be obtained free of charge from The CHPQA Administrator, The Gemini Building, Fermi Avenue, Didcot, OX11 OQR (Tel: 01235 753004).

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.