Oil Recycling Association            

62 Lower Street, Stansted, Essex, CM24 8LR, United Kingdom.

To  USED  OIL PRODUCERS; 

MANAGING USED OR UNWANTED LUBRICANTS AND FUELS

THE IMPACT OF NEW REGULATION

An Important Communications Message from the Oil Recycling Association

to producers or holders of Post Use Oil that is sometimes referred to as

 Discarded or Waste Oil

Q1. Who is The Oil Recycling Association [ORA] and what does it do?

A1. ORA is a UK Trade Association whose members collect and process for recovery the majority of waste automotive, shipping and industrial oils in the UK. These oils are mostly derived from used lubricating oils but unused fuels and their residues are also managed by our members. This note is not concerned with edible cooking oils, be they of animal or vegetable origin.

Q2. What Happens to Used Oils?

A2. Most used or discarded oil is recovered and made into a useful fuel called Recovered Fuel Oil (RFO). Historically, RFO has found use in a number of industrial applications as an alternative hydrocarbon fuel to virgin fossil materials, for example oil or gas. Thus RFO may be said to have had more than one useful life, removing a source of potential pollution while making a valuable contribution to the environment and concept of sustainability.

Q3. What is Important for us to know?

A3. Waste oil producers have become used to disposing of their waste for very little cost. This is because a valuable downstream market existed that would benefit from using RFO provided it was available at a discounted cost to new fuel. Thus a demand was created for RFO that in fact exceeded its supply thus ensuring a high propensity for used oils to be efficiently collected. 

Q4. So what is Changing and When?

A4. In most cases the burning of RFO is, or soon will, be subject to the Waste Incineration Directive sometimes called the WID. This Directive is extremely restrictive in its technical content concerning both combustion conditions and attendant emissions. The two major existing outlets for RFO, the coal fired electrical power generating sector and the quarry products / aggregates sector, find great difficulty in meeting the stringent requirements of WID. Most operators in these businesses are finding that they are unable to comply with the new requirements without incurring disproportionate new costs. So unless there is a late change in Government policy, many will have to cease using RFO by the end of 2005.

WID legislation is now in force for new users of RFO but it is for existing users that the largest impact occurs at the end of 2005. In short, it is most likely the total existing commercially viable market for RFO will cease at the end of this year.

Q5. If RFO can no longer be so easily used what will happen to it?

A5. A number of things are forecast. Firstly, RFO can be used as a fuel and meet the legislative requirements of the WID in authorised cement kiln applications. Secondly, it can assist in the steel making process, a non WID activity. However, cement kiln operators have a number of waste derived fuel options which would set a new market valuation for RFO. Because of the choices open to the cement industry the future value of RFO to them is not expected to be high and could even be negative i.e. they could require payment to take it.

Steel makers also have choices on sources of carbon (a role RFO plays) so that is a precursor to making the chemical reducing agents that steel making requires. This industry has an extra benefit in that a complex hydrocarbon duty derogation rule applies.

So, RFO would have to be competitive with such other materials and it is expected this would be at a much lower value than it enjoys today.

The reduction in revenue received by the processors of your waste oil will therefore be reflected in a substantial increase in collection costs to the generator i.e. you the waste producer.

Q6. We have heard that it is acceptable to burn waste oil produced at the site of its generation in a Small Waste Oil Burner and be exempt from the WID – is this the case?

A6. In England and Wales and Northern Ireland the Government is considering whether regulation of these small appliances under local authority auspices (as at present) is delivering proportionate and effective safeguards.

ORA believes they are not sufficiently well regulated and the number involved questions the proportionality issue. In most major EC countries such use is banned and indeed the Scottish Executive has signalled that is their opinion too. The European Commission has historically and quite firmly signalled that such appliances are not exempt. ORA anticipates that use of used oil in these small appliances will shortly be prohibited in England and Wales.

Q7. How will this legislation impact on me as a producer of used oil?

A7. As the costs of collection and processing can no longer be recovered from existing end users and the forecast value of RFO drops to reflect replacement markets, ORA members have no alternative but to pass their costs back to waste producers in the form of charges. ORA cannot forecast at today’s date how much it will cost to dispose of your oil but it is likely to be quite considerable and more commensurate with other hazardous waste disposal activity.

Q8. Is there anything else I need to know?

A8. Yes. Importantly, the devolved Governments of the UK will be introducing new Hazardous Waste Regulations that are expected in July 2005, but these will vary in nature from country to country. In most areas it is a requirement to register as a Hazardous Waste Producer and new consignment and waste tracking procedures will apply as will penalties for transgression. Such procedures will incur new costs which again cannot be absorbed by the collecting and processing industry and these too will have to be passed on to waste producers.

Q9.  Won’t all of this encourage illegal disposal of used oil and if so, do the new requirements make sense?

A9. ORA believes in respect of using RFO strict adherence to WID will lead to more reported oil pollution incidents as unscrupulous waste oil producers seek to avoid the greatly increased cost of disposal.

ORA have advised Government that in its view the net benefits to the environment in ceasing to permit the existing users to continue using RFO will be negative. This is because for technical reasons when switching to alternative new fuels (whose combustion is not controlled by WID) certain emissions are actually increased.

The regulatory control of identifying producers of waste oil and of its collection together with its attendant processing and all necessary tracking is supported by ORA.

Q10. Is ORA therefore against the WID?

A10. Not at all, nor is it against the polluter pays principle. What we see is that in respect of burning used oil under WID an unintended consequence has arisen. This is because pollution will actually increase when switching to certain new fuels and it will be a very long time before new combustion regulations can correct that situation. In the meantime, used oil still has to find a home and in some parts of the country there are either few or no cement or steel works locally available to oblige. ORA believe it better to adopt a solution where market forces have already provided one at no increase in negative impact to the environment.

ORA suggest that Government should advance that point to the European Commission and seek to resolve that matter rather than blindly apply the Directive.

Q11. As a Waste Producer What Should I be Doing?

A11. Three things:

1. ORA is encouraging the communication of these changes so that there is as smooth a transition as possible starting in the middle of 2005 for Hazardous Waste Issues and particularly in the latter part of 2005 for WID compliance . Please ensure all in the chain of waste oil generation in your company or organisation understand the situation and help to prevent pollution.

2. Maintain close contact with your used oil collector and seek information on the evolving regulatory position.

3. Prepare yourselves for increased charges and please recognise these are as a direct result of new legislation.

4. If you believe this situation makes little sense complain to Government, Environment Regulatory Offices, your MP, NGO’s etc.

A Communication Note produced by the ORA aimed at explaining the changes occurring to UK Waste Oil Management.

March 2005

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