Consumer demand for eco-friendly products is driving tremendous growth in the waste oil recycling industry.
The waste oil market was valued at nearly $67B in 2022 and is projected to surpass $93B by 2028, at a strong CAGR (compound annual growth rate) of 6.02 percent.
Stakeholders that include environmental advocacy groups, the federal government, refiners, lubricant manufacturers, and base oil suppliers are taking note.
But what exactly can lubricant makers expect from a greater investment in waste oil recycling in the coming years?
Why Lubricant Makers Are Embracing Waste Oil Recycling
In a December 2020 report to Congress, the U.S. Department of Energy (DOE) detailed many environmental and economic benefits of recycling waste oil.
DOE argued that used oil recycling:
- Advances sustainability by extending the life of U.S. crude oil resources.
- Protects the environment by reducing the likelihood of soil and water contamination.
- Conserves energy, “as it can take less energy to recycle used oil than to create new lubricating oil from virgin crude oil.”
- Helps provide consumers with a range of economical product choices.
Lubricant manufacturers are interested in sustainability, efficiency, and marketability, and not just due to the ideological appeal of conservation.
These metrics represent returns on investment. It’s the profitability of waste oil recycling that will drive increased adoption of re-refined base oils this decade.
Benefits of Waste Oil Recycling for Lubricant Manufacturers
As the marketplace and regulatory environment increasingly reward sustainability efforts, many lubricant makers will partner with the used oil recycling sector to remain competitive.
Corporate Reputation
When promoted through a strong communication strategy, the inclusion of recycled waste oil in consumer lubricants can give brands a powerful competitive boost.
Studies have shown that consumers not only actively look for “sustainable” or “eco-friendly” products but are willing to pay more for them.
Evidence of this is driving more companies to adopt a stronger focus on environmental, social, and governance (ESG) initiatives.
“Products making ESG-related claims averaged 28 percent cumulative growth over the past five-year period, versus 20 percent for products that made no such claims.” – McKinsey & Co.
Investment in waste oil recycling may become a strong market differentiator for some lubricant brands, allowing them to tap into this ESG boost effect in the same way other industries have.
Environmental Impact
Marketing can help drive consumer behavior to a point. Making a real impact and communicating progress toward sustainability goals to internal stakeholders is also crucial.
The primary environmental benefit of waste oil recycling is in reducing the amount of adulterated oil that could contaminate soil and water.
In addition, some evidence suggests re-refining waste oil helps reduce the carbon footprint associated with oil refining.
One Canadian re-refiner conducted a GHG (greenhouse gas emissions) study on its facility in Vancouver, British Columbia. The assessment found:
“GHG emisssions … were approximately 44,700 tonnes less CO2e (carbon dioxide equivalent) annually than if the same volume was produced through refining of virgin crude oil.”
Reporting these positive environmental impacts helps give internal stakeholders a sense of pride and lends authenticity to sustainability claims.
Explore Waste Oil Recycling with Renkert Oil
As a leading base oil supplier, we keep a watchful eye on emerging trends and help our customers navigate changes on the horizon. The growth of recycled oil is one of those trends.
In addition to traditional refiners of virgin crude, we work with re-refiners to provide lubricant manufacturers with a wide variety of quality base oil products.
Renkert Oil has offered recycled base oils for over 15 years. Our connection with the waste oil recycling sector is part of our strategy to serve the diverse needs of lubricant makers.
For your company, advancing sustainability may be among the most important of those needs.
If so, learn more about how Renkert Oil can help you reach your sustainability goals with high-quality recycled oil. Contact our recycled oil specialists today!