Asia’s Rerefining said to need regulation, scale

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Asia's Rerefining

Asia’s Rerefining

Asia’s rerefining sector needs scale and regulations to grow, industry experts said at the ICIS Asian Base Oils and Lubricants Conference.

“There is a lot of momentum and improvements in technology to do it at scale and start-ups using artificial intelligence and digitalization to make the whole eco-system to scale,” said Mansi Tripathy, Shell Lubricants’ vice president of commercial lubricants in Asia-Pacific, said during a panel discussion.

However, “there are operational and economic barriers,” she added.

Operational barriers for rerefining

Operational barriers include a lack of organized systems for used oil disposal, collection and segregation. For example, “there are challenges in infrastructure in India, although the Indian government is pushing for a circular economy for used oil,” said Kasturi Bhave, co-founder and chief-financial-officer of Rosefield Energy Tech Pvt. The Indian consulting firm specializes on the topic of sustainability in the lubricant and electric vehicle sectors.

State-owned “Indian Oil and Hindustan Petroleum are coming up with new products using rerefined base oil,” she said.“Eighty percent of collected used oil is recycled to fuel, and this is not good for carbon footprint. In Asia, we are still at a nascent stage.”

For Asia to develop the rerefined base oil sector, scale is key. “Once we get the scale, there is the technology, and we can make it commercially viable,” said Tripathy.

Tripathy also sees a need for the development of a “robust standard” for rerefined base oil and to move from producing API Group I rerefined base oils to Group II and Group III.

The prevalent quality level of rerefined base stocks varies between regions. Most of the rerefined oils produced in the United States and South America are Group II, while Group III is most common in Europe and Group I in Asia, she said.

In terms of government support, standards and regulations are imperative. “For example, waste oil has to be rerefined instead of being burnt, and there must be clear responsibility for the producers and consumers,” said Tripathy. “Traditionally there is a [negative] stigma among consumers [on rerefined base oil],” Bhave said. “But the perception is changing, and in India, blenders were willing to pay a premium for rerefined base oil compared to virgin base oils. There is about a 72% to 80% yield from automotive lubes. So it is important to come together and collaborate.”