According to a recent Kline report, a Compound Annual Growth Rate (CAGR) of more than 23% is forecast over the next five years. Enhanced technology and infrastructure, new legislation and rising crude prices are the main drivers for a boom in the re-refining sector.
The industry is starting to realise its previously unfulfilled potential as a result of stronger enforcement of oil waste regulations. This, in turn, has led to consistent and increased collection rates, along with improved quality and cost-effectiveness of re-refined baseoils.
Enhanced opportunities in the US, in particular, has seen new plants being established across the country by major foreign re-refiners from Western Europe and India.
However, according to the report, there are still barriers to be overcome, including access to used oil and persuading consumers to accept re-refined lubricants ahead of virgin products. In response, re-refiners are forming alliances and recruiting new oil collectors, while general consolidation is taking place across the industry.
Consumers may take a little longer to convince, but, the presence of major oil brands in the re-refining market, more widespread availability and an emphasis on value, may all help the industry's cause.
Published 8th March, 2013
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