refinery closures, and evolving energy systems. Re refined material gives lubricant manufacturers flexibility and resilience, supplementing traditional supply sources with a dependable, lower carbon alternative. It strengthens the lubricant supply chain in ways that many have yet to fully appreciate.


If the environmental case is so strong, and if the operational possibilities are so beneficial, it is reasonable to ask why so much used oil still ends up being burned. The answer, uncomfortably, lies in economics. Producing low grade fuel from used lubricating oil requires far lower capital investment and operating cost than running a re refinery. When markets shift particularly when gas oil prices rise faster than base oil prices, the profitability of producing fuel from ULO can out compete the incentive to re refine. In those moments, feedstock that could have been regenerated into new base oils instead flows toward the combustion sector. In other words, we allow the cheapest and most carbon intensive outcome to win.


This situation exposes a fundamental misalignment between environmental good and market reward. Re refining is unquestionably the better choice for the planet. It is also the better long term choice for industry, offering a dependable, high quality product. But when fuel producers can pay more for feedstock, the market naturally gravitates toward the quickest profit rather than the best outcome. This tension, what I often call the carbon dichotomy, is one of the central challenges our industry must confront.


Around the world, different countries have taken different approaches to resolving this imbalance. In places like Denmark, Greece, and the Netherlands, policymakers have chosen a decisive path: they simply do not allow used lubricating oil to be burned. In these countries, 100% of collected ULO that is suitable for re-refining is re refined. Germany and France have taken a slightly different route by imposing high re refining quotas, often requiring as much as eighty percent of used oil to be regenerated. Some regions focus on the product end by mandating that a certain percentage of finished lubricants contain re refined content. Most of these strategies work because they correct the market failure that allows combustion to out compete regeneration.


Unfortunately, not every country has taken such strong action. While the UK has historically taken


steps to define the quality of waste oil derived fuels, post BREXIT Government has introduced The Waste (Circular Economy) (Amendment) Regulations 2020 that give effect to the main principles of the EU Waste Framework Directive requiring that waste oils should be regenerated to produce base oils for reuse, or are treated in an environmentally equivalent manner, of which burning is generally not one.


Hence while UK law sets out a duty on waste producers or holders of waste oils to follow a hierarchy to regenerate consistent with EU law, there is little regulatory effort to deliver that requirement hence opportunities are missed and much waste oil is still burnt. This is an area requiring the lubricants and waste oil sectors and UK Governments’ and their Regulator’s to square up and see the law is now implemented.


Economic mechanisms can also help shift the balance. In the UK, duty on ULO derived fuels are applied to ensure taxation parity with virgin fuels that otherwise would be an incentive to burn. It also recognises that re-refining ULO does produce some side steams of fuel. Subsidies and credits can help level the playing field for re refining. Where markets are deemed to have failed to manage waste oils to reduce the pollution potential and legislative requirements, it has been the practice to see Extended Producer Responsibility schemes introduced to ensure that those who profit from the sale of lubricants also take responsibility for their end-of-life impact. In Italy, for example, the CONOU system which is a national system for the collection and re-refining of ULO, has helped ensure that almost all used lubricating oil is collected and re refined, demonstrating what is possible when incentives and responsibilities are aligned.


But we must not forget the societal dimension. Engineers, regulators, lubricant manufacturers, fleet managers, workshop owners, and consumers all play a role in shaping how waste oil is handled. We believe strongly that our industry has a responsibility to communicate the environmental benefits of re refined oil, to guide customers toward the most sustainable choices, and to use our collective voice to lobby for regulatory frameworks that match our climate commitments. Sustainability, price, and service can sit together, it is not a choice of one over the other.


LUBE MAGAZINE NO.193 JUNE 2026 45


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