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.
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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.