Market Overview:
Automotive oil recycling involves the process of re-refining used motor oil back to new base oil products. Used motor oil contains several contaminants such as combustion by-products, water and dirt. Hence, it cannot be used directly after draining. The process of automotive oil recycling involves several steps such as collecting, separating, water washing, refining and testing to produce new base oils and lubricant additives. The recycled oils are commonly used as fuel, heating oils, lubricants, greases and other applications. With rising awareness regarding proper oil disposal and benefits of oil recycling, this market is expected to grow steadily over the forecast period.
Market Dynamics:
The key drivers fueling the growth of Automotive Oil Recycling Market Demand are stringent regulations regarding used oil disposal and growing environmental concerns. Many countries and states have imposed regulations banning used oil disposal through channels such as drainage systems, sewers or on land. This is promoting the collection and recycling of used oils. Also, recycling is a more sustainable option compared to disposing off or incineration of used oils. As consumers are increasingly aware about environmental protection, demand for recycled products is on the rise. Additionally, recycled base oils have comparable quality and performance as virgin base oils, thereby increasing its acceptance across various applications. However, complexity in used oil collection due to large number of do-it-yourself oil changers is a major challenge. Moreover, setting up of recycling infrastructure requires high investment, which could hamper market growth.
Segment Analysis
The automotive oil recycling market comprises re-refined base oil and lubricating oil segments. The lubricating oil segment dominates the market with over 60% share as majority of used oil is recycled into lubricating oil through vacuum distillation and hydrotreating processes. This segment is leading as refurbished lubricating oils find abundant usage in automobile, machinery and industrial applications owing to their high performance characteristics and competitive prices against fresh oils.
PEST Analysis
Political: Government regulations promoting use of recycled oils and setting pollution control norms for used oil handlers are driving the market. Regulations encourage collection and rerefinement of waste oil.
Economic: High crude oil prices and recovering automobile production and sales provide a conducive environment for growth of cost-efficient rerefined base oils.
Social: Increasing environmental consciousness among public and industries is generating demand for sustainable waste management and resource conservation solutions like oil recycling.
Technological: Advanced vacuum distillation and hydrotreating technologies enable effective removal of impurities to restore base oil quality, meeting modern engine warranty requirements. This enhances recycled oil acceptability.
Key Takeaways
The global automotive oil recycling market is expected to witness high growth, exhibiting CAGR of 5.4% over the forecast period, due to increasing awareness about resource conservation and stringent used lubricant management rules. The market size is estimated to reach US$ 69.45 Bn by 2030 from US$ 48.42 Bn in 2023.
Regional analysis
North America dominates presently with over 35% share due to large vehicle parc and established collection infrastructure. However, Asia Pacific is poised to grow at fastest pace, driven by surging vehicle sales, growing core infrastructure and supportive regulations in major countries like China and India.
Key players operating in the automotive oil recycling market are Safety-Kleen Systems, Inc., Valvoline, Heritage-Crystal Clean, LLC, Veolia Environnement, Clean Harbors, NexLube, Recytech, Universal Lubricants, Vertex Energy, Inc., Advanced Lubrication Specialties, Delta-Energy Group, LLC, GFL Environmental Inc., HCC Eagle Environmental Services, Inc., MidStates Oil Refining Co. LLC, PetroChoice, Sage Oil Vac, Inc., Solventis Ltd., Southern Oil Refining Pty Ltd, Suncor Energy Inc., Texas Used Oil Collection Program. Key players are focusing on expansion in high growth regions and upgrading rerefinement technologies to gain competitive edge.
Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it