Aussie Rerefiners Exhale

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Australia will continue to support oil recycling through its consumer-funded rebate program after vetoing a proposal to cut benefits in half. A decision last week will have consumers paying more tax on all finished lubricants sales while rerefiners will continue collecting the current benefit allotment, which the Abbott government says will help balance the programs deficit.

The Product Stewardship for Oil Program, initiated 13 years ago, has provided an incentive for collecting and recycling used oil in Australia by using taxes on finished lubricants to extend rebates to rerefiners. The current rebate, which some lawmakers believed should be reduced in half, is 50 cents per liter for base stocks that are of high enough quality for use in automotive lubes, hydraulic fluids or transformer oils.

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The government had previously levied 5.5 cents per liter on all finished lube sales to fund the rebates, but last weeks decision will increase the tax to 8.5 cents per liter to balance out what officials calls a significant deficit in the program’s budget.

Southern Oil is particularly pleased with the governments decision to nix the proposed cuts. For the past few months the oil rerefining industry has been working hard to ensure the [Product Stewardship for Oil] scheme was not changed to the detriment of rerefiners, Managing Director Tim Rose said in a press release last week.

Rose told Lube Report last month that if the cut was enacted, Southern Oil would have to close down its flagship rerefinery in Wagga Wagga, New South Wales, where it processes around 35 million liters of waste oil per year, or 8 percent of the nations waste oil.

The [government decision] means rerefiners like Southern Oil can continue to recycle lube oil and remove hundreds of thousands of greenhouse gas emissions from the Australian environment every year, Rose concluded.

In March, Southern Oil completed construction of its second rerefinery, Northern Oil Refinery, an AUD $55 million (U.S. $51million) plant in Gladstone, Queensland.