Explanatory Statement
Issued by the authority of the Minister for Climate Change and Energy
Petroleum and Other Fuels Reporting Act 2017
Petroleum and Other Fuels Reporting Amendment (Diesel Exhaust Fluid and Technical Grade Urea) Rules 2026
Legislative Authority
Section 41 of the Petroleum and Other Fuels Reporting Act 2017 (the Act) empowers the Minister to make rules prescribing matters required or permitted by the Act to be prescribed by the rules, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Purpose and operation
The Act establishes a mandatory reporting regime for fuel information (as defined in section 5 of the Act). The information collected under mandatory reporting will be used to monitor energy security, facilitate compliance with international reporting and stockholding obligations, and enable the publication of aggregate statistics for the use of business, investors, academics and government.
The report entitled ‘Petroleum and Other Fuels Reporting Act 2017 Independent Review’ (the POFR Report) dated 5 May 2023 recommended that the scope of covered products, as defined in the Act, be broadened to include diesel exhaust fluid (DEF) and technical grade urea (TGU), and a transition from a voluntary to a mandatory reporting arrangement (see recommendations 3 and 4). The Australian Government response to the POFR Report, tabled in Parliament on 15 February 2024, supported these recommendations.
DEF and TGU are critical inputs to the heavy vehicle transport that underpins our economy. Specifically:
- DEF is a critical input to control noxious emissions from diesel engines which is relevant for heavy vehicles and truck fleets, with shortages likely to affect a range of industries including logistics, mining and agriculture.
- TGU is the main ingredient to make DEF, which is mixed with deionised water so monitoring TGU stocks provides a leading indicator of DEF supply.
Currently, industry reports on the stock of these products held in Australia, and in transit to Australia, on a voluntary basis. Under the voluntary reporting regime, industry provides data in respect of DEF and TGU by the 15th day of each calendar month.
These recommendations were adopted through the Regulatory Reform Omnibus Act 2025, which among other things, amended the definition of covered product in the Act, as recommended by the POFR Report.
The move towards mandatory reporting for these covered products is intended to strengthen Australia’s liquid fuel security and support timely industry and government responses to any DEF or TGU market disruptions. The effect of this amendment is that mandatory reporting for DEF and TGU is to come into effect on 1 July 2026.
The Petroleum and Other Fuels Reporting Amendment (Diesel Exhaust Fluid and Technical Grade Urea) Rules 2026 (the amendment Rules) amend the Petroleum and Other Fuels Reporting Rules 2017 (the principal Rules) to prescribe the relevant details related to those mandatory reporting requirements for DEF and TGU.
The purpose of the amendment Rules is to prescribe the following in respect of DEF and TGU as covered products:
- the entity that has an obligation to report;
- the reporting threshold volumes for reporting on the covered products;
- the kinds of covered activities that a relevant person must provide a report on in respect of each product;
- the fuel information that must be provided in respect of each covered activity in respect of each covered product.
Consequential to prescribing those details, the amendment Rules also:
- amend the definition of processing, which is relevant to DEF and TGU; and
- prescribe a new activity in relation to DEF and TGU for the purposes of the definition of wholesaling in subsection 5(1) of the Act.
Further details on the amendment Rules are set out in Attachment A.
Reporting under the Act can include reporting on personal information or fuel information that is commercial-in-confidence (as defined in section 6 of the Act). The Act defines such information as protected information and provides safeguards in respect of recording, using and disclosing such information. For example, access to protected information is restricted to entrusted persons (as defined in the Act). The Act limits the way that an entrusted person may make a record of, use, or disclose information in exercising powers, or performing functions or duties, and also provides for an offence if the protected information is used or disclosed in a way that is contrary to the provisions of the Act.
Other
The amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.
Attachment A
Details of the Petroleum and Other Reporting Fuels Amendment (Diesel Exhaust Fluid and Technical Grade Urea) Rules 2026
Section 1 – Name
This section provides that the name of the instrument is the Petroleum and Other Fuels Reporting Amendment (Diesel Exhaust Fluid and Technical Grade Urea) Rules 2026 (the amendment Rules).
Section 2 – Commencement
This section provides for the amendment Rules to commence on 1 July 2026. The commencement date aligns with when the mandatory reporting requirements related to diesel exhaust fluid (DEF) and technical grade urea (TGU) will commence.
Section 3 – Authority
This section provides that the amendment Rules are made under the Petroleum and Other Fuels Reporting Act 2017 (the Act).
Section 4 – Schedules
This section is a machinery clause that provides that Schedule 1 to the amendment Rules sets out the amendments to the Petroleum and Other Fuels Reporting Rules 2017 (the principal Rules).
Schedule 1 – Amendments
Item [1] – Section 4 (definition of “processing”)
This item substitutes the definition of processing in section 4 of the principal Rules to extend its meaning in respect of DEF and TGU as covered products, while retaining the meaning relevant to plant products.
For DEF, in industry settings, processing is intended to mean either of the following methods used to create DEF:
- blending solid TGU with deionised water;
- mixing liquid TGU (for example, urea melt) with deionised water.
For TGU, in industry settings, processing is intended to mean either of the following:
- where TGU is an input, blending it with deionised water to produce DEF (see above);
- where TGU is an output, producing urea of a quality that is suitable for the production of DEF.
This amendment operates alongside amendments to section 5 of the principal Rules (item [2]), which inserts the processing of DEF and TGU as covered activities. This is relevant to the general reporting requirements inserted by the amendments to section 16 of the principal Rules (items [5]-[7]) in respect of DEF and TGU.
Item [2] – Paragraph 5(b)
This item inserts the words ‘diesel exhaust fluid or technical grade urea’ after ‘plant product’ in paragraph 5(b) of the principal Rules.
As provided for in paragraph (g) of the definition of covered activity in the Act, this amendment prescribes that processing is a covered activity in relation to the covered products of DEF and TGU, for the purposes of subsection 5(1) of the Act.
This amendment operates alongside amendments to the definition of processing in section 4 of the principal Rules (item [1]) and amendments to section 16 of the principal Rules (items [5]-[7]) which provide for the reporting of fuel information for processing DEF and TGU.
Item [3] After section 7
This item inserts a new section into the principal Rules, for the purposes of paragraph (c) of the definition of wholesaling in subsection 5(1) of the Act. New section 7A prescribes the activity of making the first sale of the covered products of DEF and TGU, in Australia.
The note sets out that:
- the first sale of DEF as a covered product may occur after it is processed at an Australian plant (non-biofuel) or after it is imported; and
- the first sale of TGU may occur either after it is imported, or after production at an Australian plant (non-biofuel).
This amendment operates alongside amendments to section 16 of the principal Rules (items [5]-[7]) which provide for the reporting of fuel information for the wholesaling of DEF and TGU.
Item [4] Subsection 11(4)
This item amends the reference to the term Australian plant (non-biofuel) in subsection 11(4) of the principal Rules to include plants at which DEF and TGU is processed by a regulated entity in Australia.
This amendment operates alongside amendments to the definition of processing in section 4 of the principal Rules (item [1]) and amendments to section 16 of the principal Rules (items [5]-[7]) which provide for the reporting of fuel information for processing DEF and TGU.
Item [5] Subsection 16(1) (table heading)
This item repeals the current heading for the table in subsection 16(1) of the principal Rules, and substitutes the heading ‘Reports—general’.
The purpose of substituting the heading is to capture the fact that various kinds of covered activities in relation to different covered products are mentioned in the table. The range of covered activities can more simply be captured by the umbrella word ‘general’. This is consistent with the heading of section 16 of the principal Rules.
Item [6] Subsection 16(1) (table item 12, cells at columns 1 and 3)
This item amends columns 1 and 3 in table item 12 of the table in subsection 16(1) of the principal Rules to include a reference to the new table item 15, which relates to reporting on wholesaling of DEF and TGU.
Table item 12 operates as the default provision for the covered activity of wholesaling in respect of covered products, where a specific table item does not provide for it. It is not intended to apply to wholesaling of DEF or TGU; rather, table item 15 (item [7]) is intended to apply to that circumstance.
Item [7] Subsection 16(1) (at the end of the table)
This item inserts three new rows into the table in subsection 16(1) of the principal Rules; specifically, table items 13, 14 and 15.
Table item 13 is intended to build on the existing voluntary requirement on wholesalers of DEF or TGU to report on the stock of those products that they own at the end of each reporting period. In current industrial settings, the entity responsible for reporting (as per column 2 of the table item) may not be the same entity that is engaging in the covered activity (as per column 1). For example, the owner of DEF at a processing plant would be the entity that has the authority to undertake the first sale of the DEF in Australia. This entity may or may not be the owner of the processing plant. In contrast to the voluntary scheme, the reporting requirement only applies to persons who recorded sales above 5 megalitres of DEF or 1,800 tonnes of TGU in the previous financial year: please see the commentary on item [9], below.
Table item 14 is similar to the existing voluntary requirement on producers of DEF or TGU to report total owned stocks of the following during each reporting period:
- TGU used in blending;
- DEF derived from blending;
- DEF derived from ‘other production’.
In addition, table item 14 introduces a new requirement to report TGU derived from ‘other production’. Derivation from ‘other production’ in this case refers to any potential domestic production of TGU. Similarly, DEF derived from ‘other production’ refers to any potential domestic production of DEF from sources or processes other than TGU (for example, urea melt). Including ‘other production’ in the principal Rules will avoid the need to amend them should such production methods be utilised in Australia in the future.
Table item 15 is intended to reflect the existing voluntary requirement on wholesalers of DEF and TGU to report total quantities of wholesaled stocks during each reporting period.
Item [8] At the end of subsection 16(3)
This item amends subsection 16(3) of the principal Rules to provide that fuel information provided pursuant to column 3 of new table items 13-15 in the table in subsection 16(1) of the principal Rules (item [7]), which relate to reporting for DEF and TGU, does not need to be broken down into the categories or subcategories set out in Schedule 1 to the principal Rules.
Schedule 1 to the principal Rules does not provide for categories or subcategories of DEF and TGU, so it is not necessary for reporting on quantity of those covered products.
Item [9] At the end of subsection 16(5)
This item inserts new paragraphs into subsection 16(5) of the principal Rules, which set the threshold quantities of DEF and TGU for the reporting period that trigger a person’s obligation to report under subsection 11(2) of the Act.
Specifically:
- New paragraph (f) provides that a person is not obliged to report on engaging in the covered activities of holding stock, processing, or wholesaling DEF, as prescribed in new table items 13, 14 or 15 (item [7]), if that person wholesaled less than 5 megalitres of DEF during the previous financial year.
- New paragraph (g) provides that a person is not obliged to report on engaging in the covered activities of holding stock, processing, or wholesaling TGU, as prescribed in new table items 13, 14 or 15 (item [7]), if that person wholesaled less than 1,800 tonnes during the previous financial year.
- New paragraph (h) provides that a person is not obliged to report on engaging in the covered activities of processing DEF, as prescribed in new table item 14 (item [7]), if that person first owned less than 5 megalitres of DEF during the previous financial year. In this instance, ‘first owned’ is not intended to refer to a covered activity, but rather if the person responsible for reporting (as set out in column 2 of the table in section 12 of the principal Rules) owns the TGU, as compared to undertakes the wholesaling.
- New paragraph (i) provides that a person is not obliged to report on engaging in the covered activities of processing TGU, as prescribed in new table item 14 (item [7]), if that person first owned less than 1800 tonnes of TGU during the previous financial year. In this instance, ‘first owned’ is not intended to refer to a covered activity, but rather if the person responsible for reporting (as set out in column 2 of the table in section 12 of the principal Rules) owns the TGU, as compared to undertakes the wholesaling.
Item [10] After subsection 17(7)
This item inserts new subsection (7A) into section 17 of the principal Rules, which provides that the reporting obligations for holding stock that are set out in subsection 17(1) do not apply in relation to DEF or TGU. This amendment prevents any duplication of reporting obligations in relation to holding stock, in view of new table item 13 of subsection 16(1) of the principal Rules.