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Tax and Revenue Administration
Carbon Levy on Marked Fuel
Special Notice Vol. 11 No. 2


Last Reviewed: December 14, 2016
Produced by: Alberta Treasury Board and Finance, Tax and Revenue Administration
For more information: tra.carbonlevy@gov.ab.ca

Vol. 11 No. 2 / December 2016

SPECIAL NOTICE - CARBON LEVY ON MARKED FUEL

PURCHASES BY CONSUMERS / SALES BY EXEMPT-SALE VENDORS

NOTE: This special notice 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 special notice and governing legislation, the legislation takes precedence.

Index


Marked Fuel

Marked fuel under the Climate Leadership Act (Act) and the Climate Leadership Regulation (Regulation) has the same meaning and provisions as marked fuel under the Fuel Tax Act and its Regulation. Other than licenced farm vehicles, marked fuel can only be used in unlicensed vehicles and equipment.

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Carbon Levy Exemptions on Marked Fuel and Evidence of Exemption

Consumers who use marked fuel for eligible exempt purposes may provide the required evidence of exemption at the time of purchase, and purchase marked fuel exempt from carbon levy from exempt-sale vendors, as follows:

Specified Gas Emitters

Marked fuel used in the operation of a specified gas emitter, if the emissions from the fuel are direct emissions as defined in the Specified Gas Emitters Regulation, is exempt from carbon levy.

To be eligible to purchase marked fuel exempt from carbon levy, the consumer needs to provide the exempt-sale vendor, at the time of purchase, a carbon levy exemption certificate issued by Alberta Treasury Board and Finance, Tax and Revenue Administration (TRA).

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Oil and Gas Production Process Before 2023

Marked fuel used in an oil and gas production process before 2023 is exempt from carbon levy.

To be eligible to purchase marked fuel exempt from carbon levy, the consumer needs to provide the exempt-sale vendor, at the time of purchase, a carbon levy exemption certificate issued by TRA.

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Farmers using Marked Fuel for Farming Operations

Marked fuel used by farmers for farming operations is exempt from carbon levy.

To be eligible to purchase marked fuel exempt from carbon levy, a farmer needs to provide the exempt-sale vendor, at the time of purchase, an Alberta Farm Fuel Benefit (AFFB) certificate issued by Alberta Agriculture and Forestry.

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Marked Fuel Uses Not Listed Above − Subject to Carbon Levy

Carbon levy exemption is not available on marked fuel other than the three types of uses indicated above. Consumers must purchase marked fuel including the carbon levy unless the fuel is used for the three purposes above.

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When Marked Fuel is Not Reasonably Available

If a consumer holds a carbon levy exemption certificate or an AFFB certificate and is entitled to purchase marked fuel exempt from carbon levy, for eligible uses, but marked fuel is not reasonably available, the consumer may purchase clear fuel and apply for a rebate from TRA on the carbon levy the consumer paid on the clear fuel.

TRA considers marked fuel not reasonably available when:

  • no bulk fuel dealer with marked fuel available for sale is located within a 50-kilometre radius of the off-road location; or
  • the fuel was being consumed in an off-road operation where clear fuel must be used and there existed a legal restriction (e.g., zoning), prohibiting the consumer from having more than one storage tank.

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Sale of Marked Fuel By Exempt-Sale Vendors

An exempt-sale vendor is a person registered under the Act and the Regulation to sell fuels exempt from the carbon levy. See Carbon Levy Information Circular CL-T-1, Transportation Fuels - Registration for information on registration of exempt-sale vendors.

When Consumers Provide Carbon Levy Exemption Certificates or AFFB Certificates

Exempt-sale vendors must sell marked fuel exempt from carbon levy to consumers who provide the vendors with carbon levy exemption certificates, issued by TRA, or AFFB certificates at the time of sale. Exempt-sale vendors must record the approval number of the certificates.

Exempt-sale vendors who paid carbon levy when they purchased marked fuel for re-sale may apply to TRA for a refund of the carbon levy on the marked fuel the vendors sold exempt from carbon levy to consumers providing the carbon levy exemption certificates or the AFFB certificates at the time of sale. Information on the refund process will be provided before the end of 2016.

Exempt-sale vendors who are direct remitters may deduct the exempt sales on their direct remitter returns accordingly.

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When Consumers Provide the Tax Exempt Fuel User (TEFU) Certificates

Exempt-sale vendors must not sell marked fuel exempt from carbon levy to consumers who provide the vendors with TEFU certificates. Consumers holding TEFU certificates will continue to receive the exemption of fuel tax on marked fuel capped at $0.09 per litre.

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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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