Government Initiatives

The Department of Environment & Heritage develops and implements national policy, programs and legislation to protect and conserve Australia's natural environment and cultural heritage.

In July 2000 the Commonwealth Government passed the Product Stewardship (Oil) Act 2000 and the supporting Product Stewardship (Oil) Regulations 2000 to support the Product Stewardship for Oil Program. The Program is administered by the Department of the Environment and Heritage and aims to encourage the management and re-refining of used oil by providing incentives.

The broad objectives behind the suite of Acts and Regulations that make up the Used Oil Product Stewardship initiative are to:

• Ensure the environmentally sustainable management, re-refining and reuse of waste oil by supporting economic recycling options through product stewardship arrangements in partnership with oil producers, recyclers and the States;
• Ensure that oil producers progressively assume the costs of product stewardship and environmentally sustainable practices for used oil;
• Increase the recovery rate of waste thus avoiding environmentally damaging disposal of used oil;
• Ensure that products manufactured from used oil meet the relevant Commonwealth environmental standards; and
• Allow transitional assistance to introduce product stewardship arrangements.

The main financial mechanism is a levy/benefit scheme whereby all new lubricating products (local manufacture or import) are levied (currently 5.4 cents/litre). This creates a fully hypothecated pool of funds to be applied by the Minister (as advised by the Oil Stewardship Advisory Council) to redress the limitations to the self-regulated waste recovery market.

The market for recycled oil products is small and fragmented. This, environmental restrictions and low profit margins in the oil recycling industry highlight the significant constraints and limited opportunities for expansion of the waste oil collection and recycling industry.

Benefits are paid to used oil recyclers in proportion to the volume of material that they recycle and the inherent resource value that they recover from the used oil.

	Product Stewardship (Oil) Act Benefit Rates
	Cat Description Benefits (cents/litre) 1 Qualifying* re-refined base oil (for use as a lubricant or hydraulic oil etc) 50 2 Other re-refined base-oils (eg chain bar oil, manufactured oil products) 10 3 Diesel fuels to which the Excise Tariff Act 1921 applies 7 4 Diesel extenders (filtered, de-watered and de-mineralised) 5 5 High grade industrial burning oils (filtered, de-watered and de-mineralised) 5 6 Low grade industrial burning oils (filtered and de-watered) 3 7 Industrial process oils and lubricants, (reprocessed or filtered, but not re-refined 0

* The regulations specify a health, safety and environment standard for re-refined lubricants comparable with current requirements for similar 'virgin' products. The basic requirement of this standard is to produce non-carcinogenic products.

SOR is the first (and currently the only) company in Australia to produce a fully re-refined lube-to-lube product that qualifies for and receives the Category 1 - 50c/L benefit.

More information on the Product Stewardship Program can be found at www.oilrecycling.gov.au

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