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Used Oil in Australia

Prepared by Meinhardt Infrastructure & Environment Group
Environment Australia
January 2002

Executive Summary

This project has been conducted on behalf of Environment Australia to investigate Used Oil in Australia.

On 1st January, 2001 waste oil product stewardship arrangements approved by the Commonwealth Government commenced operation. The product stewardship program allows for the oil companies to progressively assume a greater share of the costs involved in the management of waste oil. The product stewardship arrangements incorporate a Commonwealth Government funding program intended to provide transitional assistance to industry.

The scope of this project has been defined by Environment Australia to include specific categories of petroleum-based lubricants as per the classifications reported in Australian Petroleum Statistics by the Department of Industry, Science and Resources (DISR). Excluded from these specific categories, and the scope of this project, are other types of oils which are not petroleum-based, viz. vegetable oils, cooking oils and food oils.

Petroleum-based oils can cause damage to the environment if spread across land or water. Some additives or oil contaminants may also be toxic to living organisms. Recovery of used oil can help to minimise these environmental impacts.

The purpose of this project is to estimate the unaccounted for used oil in Australia. This was achieved by firstly determining the size of the Australian lubricants markets. The used oil generated by the Australian market was then assessed. An estimate of the quantity of used oil currently collected was made and thus the amount of unaccounted for used oil determined.

The Australian virgin lubricants market consists of several 'tiers' that reflect the level of engagement and market penetration by each company. The first tier is comprised of companies that are engaged in both the refining and downstream production of lubricants. The second tier of companies are those who purchase base stocks from first tier companies and then blend them with additives to produce lubricants.

A number of sources of data were consulted regarding the import, production, sale and export of lubricants in Australia. Where data had been prepared for the same component of the market (e.g. imports) by different organisations, estimates were generally inconsistent.

Comparison of data prepared by DISR to other sources indicated that the quality and accuracy of this data may be less than desirable, however the level of detail provided by the data was superior to other sources and as such the reported volume for 2000 was accepted with reservations.

Broad agreement between data sources that automotive lubricants accounted for more than one third of total lubricant sales was found. It was estimated that the sale of base stocks equated to the production of 132 megalitres of lubricants by second tier companies. Addition of this estimated total to the sales data reported by DISR yields an adjusted total volume of lubricants sold in 2000 of 581 megalitres.

Based on a lubricant market size of 581 megalitres, the total amount of used oil generated by the Australian market was estimated to be 310 megalitres. This calculation was based on used oil generation factors for specific industry segments. No direct studies on Australian generation factors were identified and thus modified international factors were utilised to determine the total amount of used oil generated in Australia. To prevent compounding potential errors in the modified international factors, one source of generation factors was accepted, with some reservations.

Waste oil is collected both by commercial operators and through Government programs, however the volume collected by the latter will in many instances be forwarded to the former. Waste oil may also be collected by operators within specific industry sectors for direct re-use.

The volume of waste oil collected has been estimated by previous studies as being within the range of 91 to 186 megalitres. Advice received from collectors and reprocessors indicates that approximately 144 megalitres are collected annually by the companies contacted. Accounting for additional volumes collected by companies that did not provide information, and for collection for direct re-use, suggests a range of 150 to 200 megalitres.

It is difficult to quantify the proportion of used oil being sourced according to particular industries or collection systems, however the data suggests that significant quantities are collected from the manufacturing sector, and stakeholder advice indicates that automotive repairers and similar mechanical workshops are a common source for commercial collections. Similarly, it is difficult to quantify the types of oil being collected, however stakeholder advice suggests that the bulk of collected oil is automotive engine oil.

It is estimated that between 110 and 160 megalitres of used oil is currently unaccounted for. A portion of this amount is considered unrecoverable for a variety of reasons. This portion was broadly estimated to be 20%. A portion of this unaccounted for oil is considered recoverable. Potentially recoverable sources of unaccounted for used oil include:

Based on the limited information currently available, with the exception of do-it-yourself activities and temporary stockpiles, the quantity associated with each of these processes could not be assessed.

Figure ES1 details the volume of the lubricants market and the amount of used oil generated, collected and potentially recoverable.

Figure ES1 Used Oil Pathway

Used Oil Pathway diagram

A variety of issues were identified relating to the unaccounted for volume of used oil. These included data reliability, collection system infrastructure, industry, regulatory, and educational issues. As a result of the issues identified, the following recommendations are made for Environment Australia to:

  1. Investigate greater coordination between the reporting organisations (viz. ABARE, AIP, ATO and DISR) in order to more closely align reporting categories.
  2. Consider initiating investigations into the consumption of oil in key processes in Australia with a view to establishing benchmarks for generation of used oil.
  3. Investigate the provision and coordination of data from all Australian States and Territories on the amount of used oil collected in ChemCollect, household hazardous waste collections and other State / Territory programs.
  4. Environment Australia investigate research into retained / recovered used oil from end-of-life vehicles.
  5. Consider the feasibility of additional research, surveys and reporting requirements to determine the amount and sources of oil currently unaccounted for.
  6. Encourage the establishment of better managed used oil collection infrastructure in regional areas. This may be achieved through infrastructure funding assistance.
  7. Encourage Local Government to provide supervision at waste disposal facilities to assist in correct disposal of used oil and used oil containers.
  8. Encourage the oil recycling industry to investigate the feasibility of establishment of temporary collection facilities for large construction, mining, etc. projects in remote areas.
  9. Environment Australia encourage relevant statutory authorities to prioritise enforcement of regulations covering licensed collection and disposal of used oil.
  10. Consider encouraging prioritisation of used oil as an environmental management issue at State / Territory level.
  11. Support programs aimed at raising awareness of used oil collection and recycling at Commonwealth, State / Territory and Local Government level.