Indian Oil Corp. Ltd (IOCL) and Re Sustainability Ltd plan to establish a nationwide system for collecting and rerefining used lubricating oil in India, the companies said. The project is intended to formalize collection of used oil and support domestic supply of re-refined base oils, as demand for lubricants continues to grow.
The companies will set up a joint venture to oversee collection, aggregation, logistics and processing. The system will source used oil from automotive workshops, industrial users and other generators. Feedstock will be processed into Group I and Group II+ base oils for reuse in lubricant production.
India generates around 1.3 million metric tons per year of used lubricating oil, according to industry estimates. Around 15% is currently recovered through formal recycling channels. The remainder is handled through informal routes, including use as fuel, resulting in limited recovery of base oil components.
The project is expected to target about 100,000 t/yr of collection in the initial phase and 50,000–100,000 t/y of re-refining capacity
The system is expected to include traceability mechanisms and infrastructure aligned with India’s extended producer responsibility (EPR) requirements. It will also cover collection and recycling of lubricant packaging.
India’s base oil market remains dependent on imports, particularly for Group II and Group III grades.
A domestic stream of rerefined base oils could partially offset import requirements and support local blending demand.
IOCL said the project is aligned with its focus on energy security and environmental management. Re Sustainability said large-scale systems are required to improve recovery of value from waste streams.