Buying Ethanol in Australia: The Concessional Spirits Scheme


Comments Off on Buying Ethanol in Australia: The Concessional Spirits Scheme September 9, 2020 /

As an Australian supplier of Ethanol, we’re often asked to help demystify the process of purchasing it by our customers. In this guide we’ll look at the types of Ethanol available, who is eligible to purchase them, and how you can get a permit.

Ethanol (more commonly known as ethyl alcohol, spirits, or simply alcohol) is an incredibly useful chemical compound. Generally made through the fermentation of sugars by yeast, once distilled, it has a wide range of uses: as a solvent, an antiseptic sanitizer, a component in fuels, and probably most widely as a recreational drink. 

Because ethanol is so popular as a component of alcoholic beverages, the sale of ethanol in Australia is restricted under the ATO’s Concessional Spirits Scheme. This means, if you’re looking to purchase ethanol in Australia for any purpose, you need a Concessional Spirit Permit or be subject to excise duty; the commodity-based tax on alcohol, tobacco, and fuel and petroleum products manufactured or produced in Australia.

Let’s take a quick look into the different types of ethanol available, who is eligible to purchase them, and how to apply for your permit. 


Denatured vs Undenatured Alcohol

There are two types of alcohol available for purchase: Undenatured and Denatured.

  • ‘Undenatured’ alcohol is restricted for purchase in Australia. It is more commonly known as simply ethanol or alcohol. This is the pure version of the chemical compound. If you’re looking for ‘food grade alcohol’ or ‘pure ethanol’ this is what you’re after. 
  • ‘Denatured’ alcohol is unrestricted for purchase in Australia, as it has been made unfit for human consumption and is no longer any fun. It contains additives to make the alcohol poisonous and taste and smell nauseating. The most common example is Methylated Spirits, which contains roughly 10% methanol, as well as other additives such as denatonium benzoate to make it unpalatable. Because ethanol is dangerous and taxed so highly by governments, it must be made unfit for drinking before sale to the general public. 

Denatured ethanol is widely available and cheap to purchase. It is often used as a household cleaner, fuel for camping stoves, paint thinner and more. However, due to its toxicity, it cannot be used, for example, in the production of hand sanitizer due to the toxic effects of methanol when absorbed through the skin. There are still a great many uses where only undenatured alcohol will do, and getting your hands on some takes work – though it is not impossible. 


Who is Eligible to Purchase Undenatured Alcohol in Australia?

If you work as a health care practitioner, a veterinary practitioner or for a medical, government and educational institution, we have good news: you are already eligible to purchase and use ethanol (for approved purposes only) under the tax-free 3.6 tariff without needing a Concessional Spirit Permit.  

If you do not work for one of these institutions or practices, don’t worry. If you plan on using the ethanol for an approved industrial, manufacturing, scientific, medical, veterinary or educational purpose, it shouldn’t be too difficult to get approval for purchase. 

Regulations around the use of ethanol are governed by relevant local, state, territory and federal bodies, so it is difficult to provide a comprehensive list. However, approved uses include, but are not limited to:

  • Fortifying Australian wine or grape must
  • Manufacturing
    • medicines, including vaccines
    • essences and flavours
    • mouthwashes
    • printing inks
    • foodstuffs
  • Sterilising equipment
  • Preserving specimens

If you aren’t sure if your planned use of ethanol is allowed, please contact the ATO. For a full list of excise duty rates for alcohol and alcoholic beverages, click here


Applying for a Permit to Purchase Ethanol

If you believe your planned use of ethanol will be approved, and all you need to do now is submit an Application For Approval to Use Spirits. This is a simple process. Download the form from the ATO here and follow the steps provided. 

Depending on your use case, permits are generally valid for the following periods:

  • Permit for one-off specified quantity: six weeks
  • Initial ongoing permit: one year
  • Renewals of ongoing permit: five years.

You will only be allowed to purchase the allowed quantity of ethanol during this period. During your permit period, you will also need to keep clear records to show how you are using it. This means:  

  • The amount you hold
  • The amount you obtained
  • The date you obtained it
  • The name of your supplier
  • The purposes for which you used it

These records must be kept for at least five years. 


Purchasing Ethanol 

Congratulations! If you have an approved permit, we can supply you with Ethanol! 


Please Note: Because ethanol is a hazardous chemical (UN class 3: Flammable) it is time-consuming and expensive to transport interstate. CASA regulations mean is not allowed to be transported via air freight, so if you are not based in Tasmania as we are, and you are only looking for small quantities of ethanol, we are probably not the best place to purchase it.




Don’t hesitate to get in touch if you have any questions, or would like to place an order.