Sigaus Reduces Fee to Members


Sigaus Reduces Fee to Members
A truck driver oversees collection of used oil at a site in Navarra, in northern Spain. Photo courtesy of Sigaus

Sigaus, a non-profit organization that manages Spain’s recycling of used lubricants, last month decided to reduce the contribution of its member companies for management of waste oil by 17% to €60 (U.S. $64) per metric ton effective Jan. 1, 2024, citing favorable market conditions, including favorable sales prices for rerefined base oil.

This is the first time in 17 years of operation that the organization has modified its member contribution amount. The organization’s board of directors made the decision at a meeting on Sept. 14 to reduce the contribution that all companies affiliated to Sigaus make for marketing of lubricants in Spain.

The organization explained that as of Jan. 1, 2024, putting lubricants on the market will mean the retailer, and consequently the consumer, will have to pay €50/t (5 cents per kilogram) for the management of waste oil. When changing the oil in a car – estimating purchase of about 4 kg of new motor oil – the cost of waste oil management will decline from 24 cents to 20 cents, according to Sigaus.

As a non-profit entity, Sigaus is funded through a fee paid by the adhered manufacturers –depending on the lubricant that they place on the national market – a contribution that is passed on from the manufacturer to the distributor, from the distributor to the car repair workshop and, finally, to the consumer, without any possible modification throughout the chain.

The income obtained is entirely designated for the management of the used oil generated. Therefore, according to Sigaus, the funding must be sufficient for the system to provide a universal service for collection of the waste that is generated throughout Spain, guaranteeing compliance with the ecological targets established by the environmental authorities.

The organization said the reduction was possible due to mechanisms it put in place to seek maximum efficiency in financing waste oil management, adjusting it to market conditions. “In recent months, these mechanisms have made it possible to stabilize the cost of management, taking advantage of the high oil prices and, therefore, the favorable sales conditions for the products obtained from treating this waste,” Sigaus said, which includes rerefined base oil and certain types of fuel.  Spanish law requires that at least 65% of collected used oil be recycled. Most of the used oil that is recycled gets processed at one of the country’s rerefineries.

“This is the first time we have modified our rate, and we are doing so precisely to lower it by [17%] at a time of generalized price increases,” Sigaus General Director Eduardo de Lecea, said in a press release. “We want to take advantage of management cost containment and pass it on to consumers, applying one of our most deeply rooted values, which is efficiency and the optimization of costs and processes.”

De Lecea noted that one of Sigaus’ functions is to provide stability for waste management in a volatile market, such as petroleum derivatives. He said that was evident in 2016, when waste oil management coasts soared because of the low crude oil price environment, with Brent crude averaging 40 euros per barrel that year.

“When the cycle was highly unfavorable for us, and the deficit of collecting and treating each liter of waste oil was at record highs, we did not pass on the extra cost to consumption,” De Lecea said. “Instead, we borrowed on a short-term basis and once again opted for maximum efficiency, applying a financing model linked in real time to market conditions. Today, in the opposite phase of the cycle, this efficiency model is once again proving its value, allowing us to reduce what the car owner or the industry buying lubricating oil pays.”

According to a Sigaus report for 2022, 129,509 metric tons of used oil were collected and managed. Of this, 79% were regenerated to produce new lubricants. That’s well above the 65% minimum mandated by law, and marked the second straight year the regeneration rate reached that mark. That is also nearly identical to 2021, when 102,000 tons of about 129,000 tons was regenerated, for the same 79% rate.

Sigaus said that used oil that could not be used for regeneration treatment – amounting to 27,054 tons – was used for energy recovery to obtain an industrial fuel similar to fuel oil, which is widely used in cement and paper factors and other types of industrial facilities.

According to the 2022 report, 248 companies were Sigaus members at year’s end, compared to 249 at the end of 2021.

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