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Tax and Revenue Administration
Other Fuels - Payable, Filing and Remittance
Information Circular CL-OF-2R1


Last Reviewed: January 5, 2017
Produced by: Alberta Treasury Board and Finance, Tax and Revenue Administration
For more information: tra.carbonlevy@gov.ab.ca

CL-OF-2R1 / January 2017

OTHER FUELS - PAYABLE, FILING AND REMITTANCE

NOTE: This information circular is intended to explain legislation and provide specific information. Every effort has been made to ensure the contents are accurate. However, if a discrepancy should occur in interpretation between this information circular and governing legislation, the legislation takes precedence.

This Information Circular explains the carbon levy payable, filing and remittance requirements for other fuels under the Climate Leadership Act (the Act) and the Climate Leadership Regulation (the Regulation), which are administered by Alberta Treasury Board and Finance, Tax and Revenue Administration (TRA).

Topics include:

 

DEFINITION

  1. The term “other fuels” is not defined in the Act or in the Regulation. It is a term used by TRA to represent the following fuels:

WHEN CARBON LEVY IS PAYABLE

  1. Except for the other fuels discussed in paragraph 3, carbon levy is payable by recipients of other fuels, at the rate for that type of other fuel (applicable carbon levy rates can be found on the Carbon Levy Rates table), including at the time the other fuel is:

    • purchased;

    • imported into Alberta for the purpose of sale or resale;

    • imported into Alberta and, without first having been sold or resold in Alberta, is put, in Alberta, into a fuel system that produces heat or energy;

    • sold or removed from a refinery or a terminal;

    • sold or removed from a gas fractionation plant, gas processing facility or straddle plant;

    • sold or removed from a gas battery, gas gathering system or gas well;

    • sold or removed from an oil battery, oil production site or oil sands processing plant;

    • sold or removed from a specified gas emitter;

    • sold, by a recipient who is the holder of a licence for exemption from carbon levy (for more information on carbon levy exemptions and licences, please see Information Circular CL-OF-3, Other Fuels − Exemptions and Licences);

    • flared or vented;

    • sold, by a recipient who purchased the other fuel exempt from the carbon levy as a holder of a carbon levy exemption certificate or other evidence of exemption;

    • sold or removed from an offsite storage facility;

    • sold or removed from a liquids pipeline;

    • sold in Alberta, but the other fuel was originally acquired exempt from the carbon levy for export from Alberta;

    • sold or removed from a facility that produces methanol; or

    • sold or removed from a facility, other than a refinery, that produces heating distillate oil or heavy fuel oil.

  2. For the following fuels:

    • coke oven gas;

    • refinery gas;

    • low heat value coal;

    • high heat value coal;

    • refinery petroleum coke;

    • upgrader petroleum coke;

    • coal coke;

carbon levy is payable by consumers, at the rate for that type of fuel, in situations including the following, at the time the consumer:

  • purchases fuel, if the fuel is located in Alberta at the time of purchase; or

  • imports fuel into Alberta that, without first having been sold or resold in Alberta, is put, in Alberta, into a fuel system that produces heat or energy.

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WHEN CARBON LEVY IS NOT PAYABLE

  1. No carbon levy is payable in situations including, at the time the other fuel is:

    • exported from Alberta in bulk;

    • purchased exempt from the carbon levy by a holder of a carbon levy exemption certificate;

    • purchased by a holder of a licence for carbon levy exemption;

    • imported into Alberta for delivery to a gas battery, gas gathering system, gas well, gas fractionation plant, gas processing facility or straddle plant;

    • imported into Alberta for delivery to an offsite storage facility;

    • imported into Alberta for delivery to an oil well, oil battery, oil production site or oil sands processing plant;

    • imported into Alberta in a liquids pipeline;

    • moved from an oil battery, oil production site or oil sands processing plant to a gas fractionation plant or gas processing facility,

    • moved from an oil battery, oil production site or oil sands processing plant to an oil battery, oil production site, oil sands processing plant or oil well;

    • moved from a gas battery, gas gathering system or gas well to a gas battery, gas gathering system, gas fractionation plant, gas processing facility or straddle plant;

    • moved from a gas processing facility, gas fractionation plant or straddle plant to a gas well, gas battery, gas gathering system, gas fractionation plant, gas processing facility or straddle plant;

    • moved from a gas battery, gas gathering system, gas well, gas fractionation plant, gas processing facility, or straddle plant to an oil battery, oil production site, oil sands processing plant or oil well;

    • moved from a gas processing facility, gas fractionation plant, straddle plant or liquids pipeline into an offsite storage facility;

    • moved from an offsite storage facility to a gas processing facility, gas fractionation plant, straddle plant or an offsite storage facility;

    • moved from a gas processing facility, gas fractionation plant, straddle plant or offsite storage facility into a liquids pipeline;

    • moved from a liquids pipeline to a gas processing facility, gas fractionation plant, offsite storage facility or straddle plant;

    • sold in a gas processing facility, gas fractionation plant, straddle plant or offsite storage facility, but not delivered; or

    • sold in a liquids pipeline, but not delivered.

  2. For the following fuels:

    • coke oven gas;

    • refinery gas;

    • low heat value coal;

    • high heat value coal;

    • refinery petroleum coke;

    • upgrader petroleum coke;

    • coal coke;

no carbon levy is payable by consumers in situations including the following, at the time the fuel is:

  • exported from Alberta in bulk; or

  • purchased exempt from the carbon levy by a holder of a carbon levy exemption certificate or with other evidence of exemption.
  1. Pre-packaged other fuels in factory sealed containers of 10 litres or less are exempt from the carbon levy.

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CALCULATION OF CARBON LEVY PAYABLE

  1. The carbon levy payable by a direct remitter for a reporting period is reported on the carbon levy return for transportation and other fuels include the volume of other fuels on which the carbon levy is payable (see paragraph 2 and 3 above) and the volume of other fuels on which the carbon levy is not payable (see paragraph 4 to 6 above) for the reporting period.


  2. The reporting period for carbon levy on other fuels is a calendar month.

Carbon Levy Payable in Special Situations

Carbon Levy Payable by Direct Remitters for Own Use

  1. A direct remitter’s carbon levy payable on their own use of other fuels is the sum of the amounts determined under paragraphs 10 to 12. A direct remitter’s own use of other fuel does not include:

    • other fuel purchased and used by the direct remitter that the direct remitter was not entitled to purchase exempt from the carbon levy, or

    • biomethane that the direct remitter added to the other fuel.


  2. The carbon levy payable by a direct remitter for their own use of other fuels for the reporting period is determined by the formula:

(A − B) x C

where

A is the amount of other fuels used by the direct remitter for the reporting period;

B is the amount of other fuels in respect of which the direct remitter was exempt from paying the carbon levy;

C is the carbon levy rate for other fuels, at the time other fuels were used.

  1. If the carbon levy rate applicable to an other fuel used by a direct remitter changes in the reporting period and the direct remitter is unable to determine the amount of other fuel used on each day in the reporting period, the carbon levy payable for the reporting period must be determined by the formula:

(A x B x C / D) + (A x E x F / D)

where

A is the amount of other fuel subject to the carbon levy that was used in the reporting period;

B is the carbon levy rate for the other fuel prior to the rate change;

C is the number of days in the reporting period during which rate B was in effect;

D is the number of days in the reporting period;

E is the carbon levy rate for the other fuel after the rate change;

F is the number of days in the reporting period during which rate E was in effect.

  1. The carbon levy payable on a blend that includes more than one of the following fuels is to be determined separately for each fuel in the blend:

    • natural gas;

    • coke oven gas;

    • raw gas;

    • refinery gas.

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Carbon Levy Payable for Mixtures and Blends of Fuels

  1. The carbon levy payable for mixtures and blends of fuels does not apply to:

    • mixtures of high heat value coal and low heat value coal;

    • coke oven gas;

    • natural gas;

    • raw gas;

    • refinery gas;

    • diesel; or

    • locomotive diesel.

A direct remitter must determine the carbon levy payable on mixtures and blends of other fuels in accordance with specific rules.

  1. If a substance includes amounts of more than one fuel, and the substance has not been prescribed as a mixture or blend, the carbon levy payable is determined as if the substance is fuel that is present in the highest proportion in the substance.


  2. A substance is prescribed as a mixture or blend of fuels if:

    • the proportion of each fuel included in a substance that contains more than one fuel is known; or

    • the proportion of any fuel included in a substance that contains more than one fuel, other than the fuel present in the highest amount, exceeds 10 per cent.

For the latter case, the proportions of each fuel in the substance must be determined.

  1. The carbon levy payable on the mixture or blend is the aggregate of the amounts for each fuel included in the mixture of blend determined by the formula:

A x B

where

A is the amount of the particular fuel included in the mixture or blend;

B is the carbon levy rate for that type of fuel at the time the carbon levy is required to be paid.

  1. If the carbon levy rate applicable to a fuel included in a mixture or blend changes in a reporting period and the recipient is unable to determine the amount of fuel used on each day in the reporting period, the carbon levy payable for the reporting period is the aggregate of the amounts for each fuel included in the mixture or blend determined by the formula:

(A x B x C / D) + (A x E x F / D)

where

A is the amount of fuel subject to the carbon levy that was used in the reporting period;

B is the carbon levy rate for the fuel prior to the rate change;

C is the number of days in the reporting period during which rate B was in effect;

D is the number of days in the reporting period;

E is the carbon levy rate for the fuel after the rate change;

F is the number of days in the reporting period during which rate E was in effect.

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Carbon Levy Payable for Rebranded Fuel

  1. The carbon levy required to be paid by a recipient when fuel is rebranded is the amount by which:

A exceeds B

where

A is the carbon levy payable that would be required to be paid on the fuel after it is rebranded;

B is the carbon levy payable that was required to be paid on the fuel before it was rebranded;

if the carbon levy rate that applies to the fuel after it is rebranded is higher than the carbon levy rate that applied to the fuel before it was rebranded. A refund of carbon levy may be provided if the carbon levy rate after the fuel has been rebranded is lower than the rate before the fuel is rebranded.

  1. If a recipient is billed by billing period:

    • when raw gas or natural gas is sold, removed or purchased from a gas battery, gas gathering system, gas processing facility, gas well, oil battery, oil production site, oil sands processing plant or straddle plant; or

    • when natural gas is sold, removed or purchased from a natural gas transmission pipeline

the amount of natural gas or raw gas sold, removed or purchased by the recipient during a billing period is the amount of natural gas or raw gas that should be used to determine the carbon levy payable by the recipient for the billing period.

For more information on billing period and estimates and adjustments that may be made, please see Information Circular CL-NG-2, Natural Gas (Heating Purposes) − Payable, Filing and Remittance.

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CARBON LEVY RETURNS TO BE FILED

Direct Remitter Returns

  1. A direct remitter of other fuels is required to file a monthly carbon levy return with TRA using the Tax and Revenue Administration Client Self-Service (TRACS) system.

    The monthly carbon levy return must be received by TRA through TRACS no later than 28 days after the end of the month in which the transactions occurred. For more information on direct remitters of other fuels, see Information Circular CL-OF-1, Other Fuels − Registration.

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Self Assessing Consumer Returns

  1. A consumer who purchases other fuels excluding carbon levy and who subsequently uses the fuel for non-exempt purposes must file a self assessing consumer return with TRA using the TRACS system. Examples of non-exempt use include fuel purchased exempt from carbon levy for use in an oil and gas production process and subsequently the fuel was used for other purposes; or fuel sold in Alberta that was originally acquired exempt from carbon levy for export from Alberta.


  2. A consumer who imports other fuel into Alberta, as described in paragraph 3, that without first having been sold or resold in Alberta, is put, in Alberta, into a fuel system that produces heat and energy must also file a self assessing consumer return with TRA.


  3. A self assessing consumer return must be submitted through TRACS and the related carbon levy payable remitted to TRA no later than 28 days after the end of the month the transportation fuel is used for non-exempt purposes.


  4. No carbon levy is payable on natural gas where the natural gas in a transmission pipeline is sold but not delivered, for example, natural gas trading on an exchange. Carbon levy is payable on the natural gas once purchased by a person who takes delivery of the natural gas. The person, in this case, must file a consumer return and remit the carbon levy payable for the reporting period no later than 28 days after the end of the month in which the transactions occurred. The person that sold the natural gas is not the direct remitter for purposes of the sale and does not need to collect or remit carbon levy to TRA.

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REMITTING THE CARBON LEVY

  1. Except as noted in paragraphs 21 and 22, a recipient, other than a direct remitter, generally remits the carbon levy payable to the person that supplied the recipient with the other fuel. Where the supplier is a direct remitter, the direct remitter must remit the carbon levy payable to TRA.


  2. The carbon levy payable as reported on the carbon levy return for a reporting period must be received by TRA by the 28th day after the end of the month. If the payment due date falls on a weekend or government holiday, the due date will be the next business day.


  3. There are several options for remitting the carbon levy payment to TRA including:

    • pay online using Electronic Payment through your financial institution;
    • pay using wire transfer; or
    • pay by mail, courier or in person. Cheques and money orders should be made payable to the Government of Alberta.

For more information on making a payment to TRA, please see Making Payments.

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PENALTIES

  1. If you do not submit a return as, and when required, TRA may assess a penalty against you, as explained in Information Circular CL-2, Assessments, which will be made available at a later date.

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INTEREST

  1. If a payment is late or insufficient, you will be charged interest on the amount that is not paid, as set out in Information Circular CL-2, Assessments, which will be made available at a later date

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Questions

For additional information on the Carbon Levy, please see TRA's Carbon Levy Publications and Forms page.

For general questions about the Climate Leadership Plan, please refer to the Climate Leadership Plan website at http://www.alberta.ca/climate-leadership-plan.aspx.

For questions about the administration of the carbon levy program, please email us at TRA.CarbonLevy@gov.ab.ca.

 



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