Govt, Labor agree on diesel excise

The federal government has reached an agreement with the opposition to implement a measure from last year's budget to gradually increase excise on domestically produced biodiesel and fuel ethanol.

Treasurer Joe Hockey said the government will table amendments in the Senate next week to implement these changes.

This will phase in excise payable for biodiesel producers in equal increments over 16 years.

That starts at zero 2015-16 and reaches a final rate of approximately 50 per cent of the full petrol and diesel excise rate in 2030-31.