Rerefining Subsidies Hiked in Spain

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The non-profit organization that manages the recycling of used lubricants in Spain raised its subsidy for oil collection and rerefining by 17 percent during the second quarter in order to offset declining base oil prices.

Sigaus, which is based in Madrid, said the action was part of its ongoing efforts to ensure that used lubes are recycled into base oils, the disposition preferred by the European Union and Spains government.

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The increased funding make[s] it possible to guarantee a reasonable profit for these management companies and therefore to ensure that the used oil collected is regenerated in compliance with established ecological objectives, the organization stated in a May 14 press release.

Sigaus is charged with managing Collective System of Extended Producer Responsibility, a program aimed at ensuring that waste oil rerefining remains financially viable. It does so by paying subsidies to used oil collectors and rerefiners. The funds come a tax of 6 Euro cents per kilogram charged by engine oil installers.

The organization raises or lowers its subsidies each quarter based on fluctuations in prices for base oils and waste oil. It decided to boost its contribution in the second quarter because base oil prices had fallen 20 percent since a peak in November 2018. At that time API Group I prices in Spain were above 670 per metric ton, according to the press release, but by April they had fallen to 555/t.

At the same time, prices for waste oil were holding steady or rising, the press release stated, explaining that used oil has not lost value as a raw material usable for regeneration or fuel manufacturing, but used oil, once regenerated does so, directly affecting the regenerative industry.