Moving towards a more circular economy – which is based on the principle of using, recycling, and reusing in an (almost) closed loop – could deliver opportunities including reduced pressures on the environment, enhanced security of supply of raw materials, increased competitiveness, innovation, growth and jobs, says oil recycling foundation Recycling Oil Saves The Environment (Rose) Foundation CEO Bubele Nyiba.
South Africa needs to move towards a more circular economy and away from the traditional focus on natural resources. However, the shift also poses challenges such as financing, skills, consumer behaviour and business models, and multilevel governance, he adds.ADVERTISEMENT
“The used-oil industry in South Africa is an example of a sector that would greatly benefit from becoming an entirely closed circular economy through re-refining, but this will take time.
“Internationally, there is a significant trend towards the re-refining of used oil back to base oil and it is thought that 70% to 80% of used oil will be re-refined back into base oils in Europe by the end of 2020.”ADVERTISEMENT
“Coupled with the obvious environmental benefits of re-refining, there are economic benefits to creating a closed-loop economy. South Africa has an overreliance on base-oil imports, which can carry long lead times and are impacted on by exchange rates, logistics, weather patterns and port operations. All these make re-refining an appealing choice for us,” says Nyiba.
However, South Africa will struggle to transition towards a closed-loop model, he warns.
“The local market is driven on price and it is very expensive to set up a plant to produce high-quality re-refined base oil. Installing the re-refining infrastructure runs into millions and very few businesses can afford an outlay of this magnitude.
“Coupled with this, we have a very high demand for burner fuels in South Africa – out of 350-million litres of new oil sold a year, 120-million litres is collected for recycling, and 90% of this is processed into fuel oil to be used in furnaces, boilers and other industrial heating requirements.”
Further, there are also no government incentives supporting re-refining or products made from re-refined base oil, and power costs are high, which impacts on the energy-intensive processes involved in re-refining, explains Nyiba.
“Where Europe has a very high level of environmental awareness among consumers – they label their re-refined base oil with environmental endorsements – our market is primarily driven on price and re-refined oil needs to compete on price with virgin oil.”
South Africa is probably the most developed re-refined oil market in Africa, followed by Egypt. Its market is estimated to be worth R500-million a year and is staffed by a combined workforce of 1 500 people. There are, however, currently only three re-refiners in the country that produce base oil from used lubes: FFS Refiners, Flexilube and Motolube.
“Looking ahead, the Rose Foundation would like to see South Africa follow in the footsteps of the global movement towards re-refining most used oil collected back to base oil, thereby creating a closed-loop system. We hope to see a growth in re-refining in South Africa, and, indeed, in Africa as a whole, as re-refining could unlock sustainability, create jobs, reduce reliance on imports and lower the continent’s environmental impact.
“While South Africa may not yet be able to adopt a European approach to used oil, the future will focus on a closed-loop and circular economy, which will see other companies upgrading their plants to a capacity that can produce base oil. We need to encourage those than can make the transition, without talking down our burner fuel producers,” concludes Nyiba.