Chinas Rerefiners Modernize

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CHONGQING, China – Primitive and unproductive to date, Chinas rerefining industry has begun to expand and modernize, the head of the countrys rerefining association told a conference here last month.

The timing is good, the general secretary of the China National Resources Recycling Association told the China Base Oil Summit, as rerefined base stocks can help meet Chinas burgeoning base oil demands.

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China is a net importer of base oils and other oil products, Liu Yanbin said during a Sept. 12 presentation. Recycling waste lubricants can help meet the countrys base oil demands.

Finished lubricant consumption in China has risen to approximately 7.1 million metric tons per year, Liu said, adding that the pace of growth slowed in 2012 but is believed to have accelerated again this year. Including products that are exported, the country actually produces approximately 8.2 tons of lubricants annually.

China is one of the worlds largest base oil producing countries, but nevertheless is a large net base oil importer.

Without providing statistics, Liu said that China has numerous companies that recycle used lubricants. Most of these have been small, however, as has been their combined impact. Very little used oil is rerefined to base oil, he said. More than 70 percent is not yet utilized appropriately.

Most rerefiners used primitive technologies to treat used oil, such as clay filtration and distillation.

Since 2008, however, rerefiners have begun to scale up and adopt more sophisticated processes, he said. Nowadays there are more institutes working on research and development of rerefining technologies. More rerefineries have become quite large scale, and the market has improved. These companies are planning to innovate their equipment. He added that a number of rerefiners are considering installation of hydrogenation units and are initiating contacts with international technology providers. In the past two years, Chinas rerefining association has taken information-gathering trips to the United States, Germany, Italy and the United Kingdom.

Liu claimed that the industry in China is on the verge of a significant transition, in part thanks to government support.

In order to aid the efforts of CRRA, its Special Committee on Recycling Waste Oil and its members, the government is developing some regulations to promote the rerefining industry, Liu said. The national government has already made rerefined base oils and other rerefined product exempt from the value-added tax and is drafting a proposal to exempt them from consumption taxes, too.

Some obstacles remain, such as a lack of supervision of used oil recyclers, but Liu said this, too is being addressed. CRRA is assisting the government in gradually improving management regulations and policies in the industry, he said. In the foreseeable future, most used oil will be gathered by certified collectors. The government is taking steps to support large-scale refiners and to promote more sophisticated rerefining processes. Liu said this should improve the environment while also helping China reduce its reliance on base oil imports.

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