Fuel markers are chemicals added at very low levels (parts per billion) in fuels to trace the fuels while they move through the supply chain.
Fuel fraud is a global problem estimated at more than USD 130 billion per year, affecting governments, consumers and the oil industry. The opportunity for fraud arises when there is a prize difference between countries or between taxed and subsidized fuels. Typical fuel frauds include:
•Smuggling – when fuel is moved in and out of a country illegally e.g. from neighboring countries or exported to a country with higher tax rates
•Adulteration – when fuel grades with high tax rates are mixed with subsidized, stolen, low-cost or tax-exempt fuel components
•Tax-free, transit or intercompany fuel dumping – when tax free exports, or fuels in transit, are directed back into the market of origin
•Grade swapping – when higher fuel grades are replaced by lower quality grades e.g. premium gasoline grades replaced by regular grade or low sulfur diesel substituted by high sulfur diesel
•Fuel laundering - when fuel markers used by the government are removed from low-taxed fuels (e.g. for agriculture) and sold for high-taxed fuels (e.g. automotive)
The consequences of fuel fraud include:
•Loss of revenue for governments
•Subsidy abuse whereby funds are diverted from their intended beneficiaries
•Loss of revenue and market share for oil marketing companies, as well as reputation damage
•Health and safety issues for consumers due to exposure to lower quality fuels or unsafe products
•Environmental pollution because of high emissions from lower quality fuels
•Reduced engine-performance because of poor quality fuels
EU
In the EU, Directive on fiscal marking of gas oils and kerosene provides the legal basis for the establishment of the common marker, known as the ‘Euromarker.’ The Directive requires the Euromarker to be added to gas oil and kerosene (other than jet fuel) when these products are ‘released for consumption’ exempt from excise duty or subject to an excise duty rate lower than the standard one applicable to fuel used as propellant for road vehicles. In practice, agricultural activities, heating, and navigation and fishing are the three main uses for which the Euromarker is mandatory. Other less important fuel uses subject to fiscal marking include the production of electricity, selected industrial activities (in particular the construction sector) and certain modes of transport (inland navigation and rail transport).
Also, the Directive requires EU member states (MS) to adopt appropriate sanctions and enforcement measures to ensure proper implementation. The Directive entered into force on December 26, 1995. However, due to the length of time taken to select the common marker, implementation was delayed and it was adopted in 2001. The Euromarker selected is commercially known as Solvent Yellow 124. There is a regular review of the marker selected every five years to monitor not only technical developments of the marking system but also assess potential needs to counteract new fraudulent uses. As a result, the use of Solvent Yellow 124 was confirmed in 2006, 2011 and 2016. On April 7, 2022, the European Commission (EC) Dow’s ACCUTRACE™ Plus fuel marker as the EU's new Euromarker. The ACCUTRACE™ Plus fuel marker was chosen as it is resistant to illegal removal techniques and it performs better than alternative technologies and the Solvent Yellow 124 fuel marker.
The EC has set a 24-month transition period during which both markers, ACCUTRACE™ Plus Fuel Marker and Solvent Yellow 124, can be used in parallel to allow the fuel industry to smoothly adopt the new Euromarker.
UK
From April 2015, the ACCUTRACE™ S10 fuel marker was selected to be used to fight against laundered diesel in the UK and Ireland, after a technical review of available technologies by His Majesty's Revenue & Custom (HMRC) of the UK and Exchequer of Ireland.
During the technical review, laundering volumes decreased from 5,544 m3/week in 2013/14 to 354 m3/week in 2016/2017. This represents a 93.7% reduction in the UK and indicates that the fuel marker has had a significant effect in preventing fuel laundering operations, allowing an 88% volume reduction of associated hazardous waste from 2013/14 to 2016/17.
In the UK, excise duty is reduced for oils in industrial and off-road use. They are marked to show that they have been rebated. It is therefore illegal to use rebated fuels as fuel in road vehicles. The use of markers is stipulated in the Hydrocarbon Oil (Marking) Regulations 2002 (). The common UK fiscal marker is based on the ACCUTRACE fuel marker. Other markers are used depending on application, such as quinizarin and coumarin.
Outside Europe
The use of fuel markers is also part of many governments' existing programs, or future plans, to prevent fuel fraud and theft, such as countries in Africa, Asia and Latin America.