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Letters to the Editor


Rerefining: Show Me the Market

Dear Lubes’n’Greases,

In response to Rohit Joshi’s critique of my article in the October 2005 issue (Rethinking Used Oil), I stand by my statements and offer the following comments.

One of the main points of the article was that thermal cracking is a market-based solution, that is, one whose primary product demand is neither created nor artificially supported by government policy or subsidy.

Mr. Joshi mentions rerefiners in Italy, but he fails to mention that Italy’s rerefiners enjoy a near-monopoly and are subsidized. A recent OECD report (Improving Recycling Markets, September 2005) states, “Given the support provided to rerefining [in Italy] it is not surprising that there is a relatively active industry with six plants …. However, it is significant that output is considerably below capacity for many of the plants. Subsidized monopolies are not market-based solutions.”

The same report observes it may be possible to support the demand for rerefined products by … If demand for a product needs to be supported, then it hardly qualifies as a market-based solution.

I stated that thermal cracking is becoming a technology of choice, which implied it is gaining wider recognition and emerging as a market-based solution. Mr. Joshi attacks thermal cracking technology, citing an example where the plant operator was producing an unstable, odorous product and put into bankruptcy. My October article explained how the ROBYS process remedies these problems. Any processing plant that markets only partially processed product would face similar difficulties.

As to my quote from the TN Sofres report to the European Commission that member states “do not favor regeneration of [used oil], but on the contrary are widely using [used oil] as fuel in industrial installations,” Mr Joshi infers that I claimed this to be a conclusion of the report. (In my article, I said the report points out this fact; it is on page 5 of the report.) The Sofres report concludes there is no major technological bottle-neck to regeneration, Mr. Joshi adds. Granted. That’s what it says. However, when one reads the entire text of the conclusions, on page 66 it states, a lot of potential users of rerefined base oils, in the automotive or industrial sector, are still reluctant to use recycled products.

The EU Directive on used oil has given priority to rerefining for many years, yet 11 Member States have not transposed the directive into their legislation. Why? Page 64 of the OECD report gives some of the reasons: There is high demand for waste oils used as a fuel compared to a small demand for regenerated lubricants. There is the typical obstacle of risk aversion. Consumers think that regenerated lubricants are of lower quality. The EU priority to rerefining is expected to soon be repealed.

I could go on, but will simply restate my assertion that rerefining is not a market-based solution. It is understandable that technology incumbents with vested interests would take exception to this and other statements I made. But unbiased and sufficiently motivated readers can research this issue for themselves and draw their own conclusions.

Don Kress

Sudbury, Canada.

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