New Russian Law Encourages Rerefining


MOSCOW – The Russian government recently adopted a waste oil treatment regulation for the first time since the collapse of the Soviet Union, an industry meeting heard last week.

Russia, Belarus and Kazakhstan, three ex-Soviet states which since 2010 have shared a common economic space, will enforce the regulation effective March 1, 2014, according to industry people who discussed rerefining at Globucs inaugural CIS Fuels and Lubricants conference here on May 21.

The regulation is a milestone for development of [virtually non-existent] used oil processing in Russia, and this technical regulation will define the rules of the rerefining game in the union, Rodion Cherednichenko of the Moscow-based Association of Waste Recycling and owner of Russian rerefiner Rosa-1, told the conference.

The regulation, titled Requirements for Lubricants, Oils and Specialty Fluids, is a result of efforts by LLK-International, Russias biggest lubricants marketer, the Association of Waste Recycling and other activists for a cleaner environment in Russia.

In the last few years we did numerous meetings with government officials and defended our position at many conferences and other events. This regulation is a result of our lobbying in the government and in the public domain, Cherednichenko stressed.

This is the first time Russia has faced such a European Union-style regulation, and it will be a challenge for the countrys business community and waste oil generators, Pekko Kohonen, commercial director at Finnish rerefiner L&T Recoil told Lube Report. Used oil producers in Russia usually burn the oil, or in the worst cases they drain it into the waterways, while the companies or individuals who collect used oil almost always work illegally. No one knows from where the oil was collected and how and where it was used, he said.

With its partner EcoStream, L&T Recoil operates a 60,000 metric ton/year base oil rerefinery in Hamina, a small Finland port city near the border with Russia. L&T tried to establish a used oil collection channel and had plans, ultimately, to build a base oil rerefinery in St. Petersburg, Russias second biggest city with over 5 million inhabitants. St. Petersburg is only a few hundred kilometers from Hamina, Finland. We had very big problems to start the business with our Russian partners. According to our estimates, around 80 percent of the citys used oil is utilized for burning and, as terrible as it may sound, the remaining 20 percent is just discharged in the landfills or lakes, Kohonen said.

L&T Recoil also found that if it wanted to export used oil out of Russia it would have to pay an export duty similar to that on crude oil and other petrochemical products such as lubricants. It was another obstacle in our efforts to establish used oil collection in St. Petersburg, he said.

Cherednichenkos association and LLK, together with the government, are trying now to bring order to the chaos of Russias used oil disposal and utilization. The regulation clearly specifies the requirements for all waste oil products, Cherednichenko said. It obliges the establishment of used oil collection points in the big cities and in the province, and creation of used oil storage facilities, as well as specifying so-called primary reception points. For example, auto service stations, numerous RZD [Russian Railways] facilities or metallurgical complexes will all become primary reception points for used products.

Furthermore, the regulation penalizes the drainage of used oil into waterways, its delivery to landfills, or mixing it with haloid-organic materials, and also forbids mixing it with oil and other finished products such as black oil or diesel fuel, or its combustion in power generation units. The first three of these activities were already covered somewhat by regulations in Belarus, Russia and Kazakhstan, but rulemaking to end the mixing of waste oil with other finished products or using it as a fuel is totally new concept thats coming to life in the Russian legislature, Cherednichenko said. He added that the recent regulation gives a totally new economic rationale for utilizing waste oil.

Russias waste oil industry currently relies on an old Soviet economic guideline that stipulated paying fees to the state if an enterprise reports more waste than the lawful limit. Unfortunately, such penalties had the effect of discouraging accurate reporting and proper collection of waste oil volumes. The new regulation overturns this old scheme and gives revised economic guidelines – the more an enterprise reports waste, the less it will pay in fees to the state. And, on the top of that, it can profit by selling its waste [oil] as a secondary raw material, Cherednichenko observed.

State-owned Gazprom Neft Lubricants, another major lubricants marketer in Russia, gave declarative support to the efforts of LLK and the Association of Waste Recycling. Through its legislative, the state has to introduce motivational programs that could stimulate both Russian producers and importers to engage in utilization of waste oils, Alexander Trukhan, the companys general director, told a conference roundtable.

It turns out that used oil collection was not an unknown topic during the Soviet times. In its best years, the Soviet Union collected up to 1.5 million tons of waste oil annually, and a great part of it had been processed or exported, Trukhan revealed. This shows, he said, that although only a very small portion of Russias waste oil is processed today, the country has experience in its appropriate utilization.

Rosa-1 owns a plant in Ryazan that can process 40,000 tons of waste oil per year, according to Cherednichenko. It also has established a network of used oil collection points in several Russian cities, including Moscow, Ryazan, Yekaterinburg, Vologda and St. Petersburg.