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03/12/2016

Low oil prices threaten to kill off recyclers

Sustainable Dev.

Low oil prices threaten to kill off recyclers

Oil regeneration is no longer profitable, thanks to low crude oil prices.

[Sergio Russo/Flickr]

Cheap oil is not good news for everyone. The recycling industries were among the first to suffer, and now the used oil regenerators are under threat. Our partner Journal de l’Environnement reports.

The French National Council of Automobile Professions (CNPA) reported on Monday (1 February) that “regenerated oils made from used oils can no longer compete with new products” since the crude oil price collapsed to $30 per barrel.

While in 2014, three quarters of the used oils collected in France were regenerated, “the whole sector is now in crisis and the French regeneration plants are fighting for their survival”.

A sector facing bankruptcy

According to the CNPA, “the financial stability of the 49 companies with official permission to collect used oils in France has been uncertain for several months, as the resale price no longer covers even the cost of collection. Some will not be able continue beyond the first quarter of 2016.”

Charging for collection?

One possible solution could be to charge for the collection of used oil, which some European countries already do. But to the frustration of the certified collectors, French law will not allow this.

>>Read: Independent study says oil regeneration is a good environmental choice

The CNPA has asked for a temporary derogation while the price of crude oil is so low, stating that it hoped to “keep this historic sector alive, as an excellent example of the circular economy”.

Each year, 200,000 tonnes of used oil are collected from vehicle maintenance and repair works in France alone.

According to the CNPA, “the collection rate for this waste [in the automotive sector] is close to 100%, which is a remarkable performance considering the dangers it can present and the disastrous environmental impacts that would follow if this waste was no longer collected and processed appropriately: one litre of oil pollutes 1,000 square metres of water”.

Used oils are classified as ‘hazardous waste’, and France enacted specific legislation regarding their collection and elimination in 1979. The management of used oils is governed by rules in France’s Environmental Code