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Oil Stewardship Advisory Council - 6th Meeting, 15 October 2002

No. Item Background/Report Discussion/Action Further Action Required Time Frame
1 Welcome

Attendees: Mike Williamson (Chair), Mark Borlace, David Braham, Doug Hagen, Cathie Halliday, Wayne Hart, Peter Holt, Paul Howlett, Martin Kirwan, Bryan Nye, Gary O'Connor, Bob Pullinger, Phillip Glyde, Fred Wren

Apologies: Andrew Poole

Visitors: Anthea Tinney, Paul Dworjanyn, Megan Smith

Mr Patrick Colmer has resigned. Mr Peter Holt will now represent the ATO.

Mr Graham McGarry has resigned. Lagoona Lime are no longer using waste oil. Mr McGarry will not be replaced.

2 Adoption of the Draft Agenda Other business to be presented after Agenda Item 9 as Mr Glyde needed to leave the meeting early. OSAC adopted the draft agenda.    
3 Previous Minutes   The Minutes of the last meeting were approved without amendment.    
4 Declaration of Conflicts of Interest in Agenda Items Mr Wren declared interest in the transitional assistance funds for rural areas. The conflicts of interest were noted by the chair.    
5 Oral report from the ATO

Year to date receipts and payments: $5.93 m collected, $2.56 m benefits paid.

In 2001-2001: $21.5 m collected, $8.1 m benefits paid. $2.2 million of levy paid was refunded for exported product.

Increased benefits due to payment of Category 1 benefit (50c/l).

Bills on exemptions from the waste oil levy and the removal of automatic indexation are being considered by Parliament.

It was requested that information on levy collected and benefits paid be provided on a state-by-state basis. ATO noted that there were strict privacy requirements limiting the information that can be required.

Further exemptions, including agricultural spray oils, are being considered by Environment Australia.

ATO will provide the information in graphic form at future OSAC meetings.

ATO will investigate whether information can be provided on a state-by-state basis.

Next meeting

Next meeting

6 Oral Report on the Oil Testing

Environment Australia commissioned a report on the testing of motor oils against standards specified under the PSO regulations. The report has been released for comment. Comments have not been fully evaluated by the Department.

It is unlikely that an RIS will be required if the regulations are amended.

The report will be finalised and distributed to OSAC members out of session. Outstanding issue remains specifications for dioxins. The process to develop national environmental standards for dioxins (lead by EA) has yet to conduct a comprehensive risk assessment on dioxins. EA to advise Late January 2003.
7 Action items from previous meeting

Delynda report

Letters from the Chair
The Chair (through Environment Australia) wrote to ChemCollect, drumMUSTER and the Kerbside Recycling Group to introduce OSAC and identify synergies.

The final Delynda report has been tabled with EA in the last week. Once cleared it will be released on the EA web site.

Except for ChemCollect SA - responses have not been received.

The Chair and AIP have had recent contact with DrumMuster. NSW EPA also has an interest in pursuing synergies with ChemCollect.


Review responses

Next meeting

8 Oral report on Transitional Funds

Expression of Interest (EOI) grants from round 1 progressing well. A grant to Southern Oil Refineries (to upgrade its plant at Wagga Wagga so that it can produce re-refined lubricant to meet PSO standards) has been finalised.

21 applications seeking approximately $8 million were received under EOI 2. Applications have been assessed and are on their way to the Minister.

201 grants totalling $4.3 million have been awarded to local governments (list provided).

Mr Glyde thanked OSAC, Ms Halliday in particular, for putting the issue of local government facilities on the Transitional Assistance agenda. EA to update progress Next meeting
9 Progress report on Fuchs' assessment OSAC members were required to provide comments on a preliminary draft of the first part of the consultancy by 13 September. A completion date for the consultancy is not known. Early indications are that even if the oil does degrade more rapidly than conventional oils, significant environmental damage may still occur. EA to circulate consultants advice to OSAC out of session.  
other business Tradeable certificates

Environment Australia provided a copy of a report on the introduction of tradeable certificates for waste oil in Australia. The report does not recommend the introduction of tradeable certificates.

Environment Australia believes the consultant's report provides a good overview of the theory and practice of tradeable instruments. It describes two potential tradeable certificates systems for the waste oil industry.

In order to comply with a Cabinet directive, the Minister has directed Environment Australia to commission a further study to design a system of tradeable certificates for waste oil. It is hoped it will be complete in the first quarter of 2003. OSAC will have the opportunity to advise the Minister on the accuracy and relevance of the study's final recommendations.

Once the study has been completed, the Sustainable Environment Committee of Cabinet will consider whether the proposed system should be trialled (approximate date - mid 2003). If a trial were approved, it would run for between 3 and 6 months. Based on the results of the trial Cabinet must then decide whether or not tradeable certificates will replace the levy-benefit scheme.

If it were decided to introduce the scheme, it would replace the levy-benefit in the 2005-06 financial year, after the 4 year review of the PSO.

Mr Glyde spoke to the item, providing an overview of a tradeable certificates scheme.

Mr Nye suggested that idea of tradeable certificates has never been accepted by industry.

There is evidence of some innovation as a result of the levy-benefit scheme.

It is difficult to discuss a tradeable certificates scheme, as the Council do not have sufficient information on details of such a scheme would operate.

One of the oil majors is on the cusp of producing re-refined lube and the decision of the Government to pursue the issue of tradeable certificates may change this.

It was suggested that a presentation at the next OSAC meeting on how a tradeable certificates system would work in practice.

Presentation on tradeable certificates for the next OSAC meeting. Next meeting
10 Draft OSAC strategic plan A small number of OSAC members met following OSAC 5 to discuss how OSAC could best contribute to the PSO. The draft Strategic Plan is a result of that meeting. The Strategic Plan includes the creation of 5 working groups and performance measures.

Environment Australia noted a change to the draft Strategic Plan regarding the scope of the holistic working group - the tyres and end-of-life vehicles are now being examined by the Environment Protection and Heritage Council

Mr Borlace suggested the performance measures in the Strategic Plan be included as a standing item at each OSAC meeting. This was agreed.

The OSAC Strategic Plan was adopted. Moved by Ms Halliday, seconded by Mr Hagan.

Reporting against performance measures to be a standing item on the OSAC agenda.  
11 OSAC working group reports

Working groups met on 14 October. Key issues identified for each group:

Communication: used oil should not be seen as 'hazardous', because then people will not want to return it; anecdotal evidence is that farmers should be targeted first; communication materials should be trialled in Victoria; brochures will not be useful - prefer information which is attached to oil containers; oil 'champion 'should be a swimmer or similar.

Holistic: there are a number of unofficial 'environmental levies' being paid; auto wreckers are a useful target; transitional assistance funds may be able to be used to establish facilities that can be expanded in future.

Markets: the existing market for waste oil is 220 million litres; market changes will make an additional 35 million litres available; this suggests that the Government should drive demand for recycled lubricant.

Collection: need to target the DIY market (especially in remote and regional Australia); oil containers are a major issue; further infrastructure is required, and baseline data is needed to measure changes in collection rates.

Strategic Group: OSAC should advise the Minister that priorities for the assessment of EOI 3 should be completion of collection infrastructure (including the development of collection 'hubs') communication (including focus on Victoria); and packaging issues.

Working group notes attached.

There was general discussion on markets for recycled oil, including:

the role of the oil majors in accepting re-refined lube as base-stock, the role of Government in promoting re-reined lubricant, whether the aim of the program is to promote lube-to-lube or the re-use of waste oil.

It was suggested that a study into the 'market barriers' to the use of re-refined waste oil be conducted. This was agreed.

Environment Australia to develop terms of reference for the market barriers study and forward them to OSAC out-of-session for comment.  
12 Review of the PSO

Environment Australia proposes to conduct a mid-term review of the transitional assistance elements of the product stewardship arrangements for waste oil. The Academy for Technological Sciences and Engineering.

The study would include identification of certain uses of oil for exemption from the waste oil levy.

OSAC agreed that they review should be undertaken.

Foreshadowed that the OSAC Chair or nominee be invited to join the steering committee.

EA to advise status at next meeting.  
13 Next meeting Canberra, 10-11 February 2003 (working group meetings on 10 February, OSAC 11 February). Working groups should continue to out-of-session work. The Chair noted that he could make video-conferencing facilities available in capital cities if required.