Only 16 percent of collected used oil is rerefined, while 78 percent is used as fuel, said Milind Phadke, energy manager at the Little Falls, N.J.-based consultancy, during the Global Used Oils 2009 webinar presentation yesterday.
Global regulation ofwaste oil disposal varies significantly by geographic region and by state or municipal area. Western Europe and America are leaders in regulation and enforcement of waste oil recycling, testing and labeling. The EU is a global leader in waste oil rerefining with its five step hierarchy going from waste prevention as higher priority, to reuse, recycling, other recovery and disposal, which has the lowest priority. In this context, finishing recycling excludes energy recovery applications, Phadke noted.
However, currently there is no significant priority for rerefining in the United States. As a result, a lot of oil installers and oil change outlets, especially in the Northeast part of the country, are burning collected waste oil to heat their premises or plants, he said. The U.S.EPA [Environmental Protection Agency]allowed combustion of used oils in space heaters that dont exceed 500,000 Btu per hour, and when the oil is self generated, Phadke confirmed.
In other parts of the world, regulation for used oil disposal is not enforced strongly, excluding the markets of Brazil and Australia where there is stringent enforcement of used oil regulation, favoring rerefining. The percentage of non-collected used oil in Europe and North America is very low (8 and eleven percents respectively), and the rerefining is high, while uncollected waste oils have a large share in South America, Asia and other parts of the world [excluding Brazil], with a lower percent sent to rerefining, said Phadke.
The top five rerefiners, including the American producer Safety-Kleen and the European Avista Oil, Viscolube, Puralube and Eco Huile, produced 43 percent of the total rerefined base stock supply, Phadke said, adding that the rest of the supply is fragmented, coming from plants that use a variety of processing technologies for producing rerefined base stocks. Some plants use solvent extraction technologies, and some use hydrotreating and other technologies. As a result, there is significant variation in the quality of the produced base stocks.
Safety-Kleen produced 16 percent of the total global supply in 2009, followed by Avista Oil, Puralube and Visoclube, each with seven percent, and Eco Huile with six percent.
The Kline analysis identified the global rerefining industry’s drivers and challenges. The last few years have seen growth of interest in rerefining due to high lubricants prices, while the rerefining technology has made significant strides, producing very good quality base stocks, Phadke revealed, adding that the growing regulatory trends in favor of rerefiners is also a catalyst that is helping the growth of this industry niche.
Lopsided regional development is a challenge for rerefining as is the small scale of many projects and the lack of standardized products.
Negative perception isperhaps the biggest challenge forrerefined productmarketers. End users who dont have experience with rerefined base stocks generally have a negative image of these products, he pointed out. The biggest obstacle for the use of rerefined base stocks is the lack of familiarity.
The current regeneration technologies allow rerefiners to produce high quality API Group I base oils and in some instances Group II quality base stocks. The potential set of products that can be blended by rerefined base stocks include most industrial lubricant applications and bottom and mid-tier automotive products,Phadke asserted, adding that top-tier products often cannot be blended using these base stocks.
Acceptance of rerefined products by OEMs is good, and they recommend such base stocks where economically and technically feasible, Phadke continued. On the other hand, smaller lubricants blenders and marketers acceptance of these base stocks depends on the individual business situation, while global lubricant majors generally find it difficult to incorporate rerefined base stocks in their blends. He explained that the reason for this is that these companies have standard global formulations.
The potential market for rerefined base stocks is 7.3 million tons and could reach 9.6 million tons by 2019, Phadke concluded.
More information on the study is available at www.klinegroup.com/reports/y684a.asp.