States in the United States have begun adopting programs that mandate collection and recycling of lubricant containers and that charge lube suppliers to cover costs. Proponents hail the programs as important steps toward reducing pollution and handling this waste more sustainably, but some marketers are balking at the size of their bill, saying it could run them out of business. A trade group is considering fighting to stop such programs before they go nationwide.
The situation also pits independent lubricant marketers against some of the industry’s largest players, who played a central role developing one of the programs.
Recycling of used lubricants themselves is a well-established practice, thanks to collection programs and processing facilities in countries around the world. Lubricant packaging, however, has proved more difficult. Plastic engine oil bottles and cartons receive much of the attention because of their number and the size of the engine oil product category. Recycling for plastics such as high-density polyethylene and polypropylene is also well established, but used engine oil bottles would need to be cleaned, and the per unit costs of doing this has been largely prohibitive.
Now a number of states are looking to try with initiatives that pass the bill. In July Colorado became the first U.S. state to adopt an extended producer responsibility program that mandates lube packaging recycling and that makes product marketers responsible. The state’s Department of Public Health and Environment adopted a program developed by the Lubricants Packaging Management Program, a non-profit group founded by big international lubricant brands, including ExxonMobil, Shell’s Pennzoil-Quaker State, Chevron, Castrol and Valvoline. The organization, whose mission statement is to help solve the problem of recycling oil products packaging, will also manage the Colorado program.
It requires companies selling lubricants and other oil products in the state to participate in the program, coordinating with LPMA to arrange collection and recycling of their product packaging. It covers several dozen categories of products, from automotive engine oils to engine treatment additives, from transmission fluids and metalworking oils to brake fluids. It applies to plastic, metal, paper and cardboard containers of up to 15 gallons.
Proponents have lauded the program as a big step toward sustainable disposal of oil product packaging.
“For engine oil containers, the program’s objectives are to collect and recycle packaging efficiently, reduce contamination, and prevent oil-coated packaging from entering landfills,” LPMA CEO David Lawes told Lubes’n’Greases. “These materials can be processed into new products, potentially lowering demand for virgin materials.”
Complaints, however, have arisen from the industry. The Independent Lubricant Manufacturers Association, a trade group based in Washington, D.C., submitted a letter to the Department of Public Health and Environment arguing that state extended producer responsibility laws “undermine federalism by projecting the regulatory preferences of a few states onto all states.” ILMA also suggested such laws run counter to President Donald Trump’s goal of reducing regulation.
ILMA’s bigger complaint concerns two fees that the Colorado program charges to oil product marketers: a planning fee of 14 cents per gallon of product sold in-state, to fund program establishment; and an implementation fee of 56 cents per gallon to pay for ongoing operations. The planning fee has been assessed since last year but will cease when implementation fees begin in January.
ILMA has blasted the fees as unrealistically excessive. “The costs of such implementation are an existential threat to the continued viability of some, if not many, independent lubricant manufacturers,” Leiter said Oct. 5 at the association’s annual meeting in Boca Raton, Florida.
Part of ILMA’s concern is that the LPMA program or others like it will spread across the country. As of September, seven states have enacted extended producer responsibility laws for packaging. Maine was the first with a 2021 law that has been funded by government but that will begin billing suppliers next year. Oregon has begun registering suppliers but has yet to bill them or set its fees. California adopted a law aiming to recycle 65% of packaging by 2032 and to collect $500 million annually for funding. Minnesota’s law aims for industry to cover half the cost of its program by 2029 and 90% by 2031. Laws for extended producer responsibility programs recently passed in Maryland and Washington and are expected to charge marketers by mid-2026. At least five other states are considering their own laws.
Leiter said he advised ILMA’s directors to consider legal action against at least one state program.
The packaging association has stated clearly that it wants to extend its program to other states.
“LPMA’s ultimate goal is to provide a consistent, practical and industry-specific compliance framework for lubricant and automotive packaging wherever packaging or household hazardous waste [extended producer responsibility] laws are enacted in the United States,” Lawes said. “The intent is to scale nationally over time, adapting to each state’s legislation and regulatory requirements.”
Colorado officials and the packaging association defended the program against ILMA’s complaints. Timothy Kinoti, spokesman for the Department of Public Health and Environment, cited provisions that can exempt small businesses from paying the fees. He added that the fees receive state oversight.
“The association’s individual program plan must include a proposed budget and a description of the process used to determine the producer responsibility dues,” he said. The producer dues must go towards reimbursement to service providers who collect, process and recycle packing generated under the program.”
The department and the packaging association noted that the program plans to monitor costs during the
first half of next year and may then adjust fees.
Leiter criticized the big oil companies involved in developing the program, claiming they decided the fees in a private meeting without input from other lube suppliers. He also complained that at least some of the packaging association’s founding members are in position to gain competitive advantage from the situation. Those that produce base oils and sell them on the open market, he said, could raise base oil prices to raise money for their fees; independents, who do not make base oils but purchase them from majors, would likely have to raise their finished lubricant prices. If the majors did not raise finished lube prices they would gain a price advantage.
Lawes discounted those concerns. “LPMA’s fee structure and governance are independent of base oil pricing,” he said. “Fees are determined based on packaging volumes and program costs, under regulator-approved rules and transparent oversight. LPMA has also established a fee-setting working group open to all participating producers to ensure clarity, input and accountability in the process. All producers, regardless of size or market position, are treated equally. Base oil pricing dynamics fall outside LPMA’s scope.”
Lawes said the environmental benefits of recycling oil product packaging should be considered along with the impacts on business. He also contended that the packaging association’s program, developed and run by industry, will be better than alternative options.
“Rather than asking whether LPMA should exist, it’s more important to consider what the industry would face without it,” he said. “Without coordinated, industry-led programs like LPMA, producers would be left navigating a patchwork of state-run systems with inconsistent rules, higher costs and greater compliance risk. LPMA was created to bring order, transparency and efficiency to that landscape.”
Tim Sullivan is Executive Editor of Lubes’n’Greases. Contact him at Tim@LubesnGreases.com