AUTOMOTIVE OIL RECYCLING MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The automotive oil recycling market is expected to reach US$ 69.97 Billion by 2030, from US$ 48.42 Billion in 2023, at a CAGR of 5.4% during the forecast period. Automotive oil recycling involves the re-refining and purification of used oils and lubricants from automotive sources into fresh lubricants or for other purposes. It helps recover the base oils and avoids waste, while also reducing reliance on crude oil. The key drivers of the market include stringent environmental regulations, advancements in re-refining technologies, and rising automotive sales.

The automotive oil recycling market is segmented by oil type, collection method, technology, end-use industry, sales channel and region. By oil type, engine oils account for the largest share of the market. Used engine oils are readily available in large volumes across vehicle service stations and garages, supporting the growth of this segment. Engine oils also fetch higher prices after re-refining compared to other automotive fluid types.

Automotive Oil Recycling Market Regional Insights:

• North America is expected to be the largest market for automotive oil recycling market during the forecast period, accounting for over 27% of the market share in 2023. The growth of the market in North America is attributed to stringent regulations around sustainable disposal of used oils in the region.
• The Asia Pacific market is expected to be the second-largest market for automotive oil recycling market, accounting for over 19.9% of the market share in 2023. The growth of the market is attributed to rapidly expanding automotive sales and vehicle parc in countries such as China and India.

• The Europe market is expected to be the fastest-growing market for automotive oil recycling market, with a CAGR of over 23.1% during the forecast period. The growth of the market in Europe is attributed to high awareness and adoption of circular economy practices in the region.

Figure 1. Global Automotive Oil Recycling Market Share (%), by Region, 2023

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COVID-19 Impact :

• Disruption in Operations: The pandemic led to temporary shutdowns of recycling facilities and disruptions in the supply chain due to lockdowns and restrictions, impacting the collection and processing of used automotive oil.
• Decreased Demand: With travel restrictions in place and fewer people using their vehicles during lockdowns, the demand for automotive oil, and consequently, the amount of used oil generated for recycling, decreased.
• Financial Impact: The economic slowdown and financial uncertainties caused by the pandemic may have led to reduced investments in the automotive oil recycling industry.
• Health and Safety Concerns: The need for additional health and safety measures to protect workers from the virus may have increased operational costs for recycling facilities

Automotive Oil Recycling Market Drivers:

• Environmental Awareness: Increasing awareness of environmental issues and the need for sustainable practices has driven the automotive industry to adopt recycling as a responsible way to manage used oil. For instance, according to the U.S. Environmental Protection Agency, recycling helps reduce pollution and minimizes the carbon footprint associated with oil disposal.
• Stringent Regulations: Government regulations and policies mandating the proper disposal and recycling of used automotive oil have significantly boosted the market. For instance, according to the U.S. Environmental Protection Agency, these regulations aim to prevent improper disposal and contamination of natural resources.
• Rising Vehicle Sales: The global automotive industry continues to expand, leading to higher oil consumption, on the road number of vehicles increases, so does the increasing generation of used oil and creating a growing need for recycling services.
• Cost Savings: Recycling used oil can be more cost-effective than producing new oil from virgin sources. Businesses and consumers are increasingly drawn to recycling as a way to save money on lubricants and reduce overall operating costs.

Automotive Oil Recycling Market Opportunities:

• Increasing Oil Consumption: As the global automotive fleet continues to grow, the consumption of automotive oil rises. This trend presents a significant opportunity for recycling companies to capture a larger market share and expand their operations.
• Technological Advancements: Ongoing advancements in oil recycling technologies enhance the efficiency and cost-effectiveness of the recycling process. Companies that invest in and adopt these technologies can improve their competitive edge and offer higher-quality recycled oil products.
• Circular Economy Adoption: The concept of a circular economy, where resources are reused and recycled, is gaining momentum. Automotive oil recycling is a key component of this concept and presents opportunities for businesses to position themselves as champions of sustainable practices.
• Diversification of Recycled Oil Products: Beyond traditional lubricants, recycled automotive oil can be used in various applications such as asphalt production, power generation, and industrial processes. Exploring these alternative markets can lead to increased revenue streams.

Automotive Oil Recycling Market Trends:

• Increased Adoption of Re-refining: Re-refining technology, which reprocesses used oil into high-quality base oil, is gaining prominence.
• Growing Use of Group II and Group III Base Oils: Recycled oil is increasingly being used as a source of Group II and Group III base oils, which meet higher performance standards. This trend reflects the improved quality and acceptability of recycled oils in various applications.
• Shift towards Synthetic Oils: As vehicle manufacturers recommend synthetic oils for modern engines, there is a corresponding demand for recycled synthetic oils. Recycling facilities are adapting to process and produce these specialized oils.
• Emergence of Eco-Friendly Additives: Manufacturers are developing eco-friendly additives for recycled oil products, enhancing their performance while reducing environmental impact. For instance, in September 2023, as per The Global Energy, the Institute of Catalysis SB RAS estimates that the global volume of plastic production has grown 250 times over the past 60 years, rising from 2 million to 500 million tons per year.

Automotive Oil Recycling Market Restraints:

• Low Consumer Awareness: Despite efforts to educate the public, many consumers remain unaware of the benefits of recycling automotive oil. This lack of awareness can result in improper disposal of used oil and hinder market growth.
• Improper Disposal Practices: Some individuals and businesses still engage in improper disposal of used oil, such as pouring it down drains or onto the ground, which can lead to environmental contamination and cleanup costs.
• Quality Concerns: Ensuring the consistent quality of recycled oil products can be challenging. Variability in the quality of used oil feedstock and the recycling process itself can affect the performance of recycled oils, impacting their acceptance in the market.
• Counterbalance: Many people are still unaware of the benefits of recycling used automotive oil. This lack of awareness can hinder the growth of the market.

Analyst Viewpoints:

• The automotive oil recycling market continues to grow steadily, driven by stringent government regulations for used oil disposal and increasing concerns over future crude oil reserves. The majority of used automotive oils generated globally are either reused after re-refining or used for energy recovery. North America and Europe currently dominate the automotive oil recycling market due to established infrastructure and collection programs promoted by local authorities. However, the market is expected to witness the fastest growth in Asia over the next decade, led by China and India, on account of rising vehicle parc and the development of recycling facilities in these countries. While recycling programs help reduce dependence on crude oil, availability of raw materials from used oils provides opportunities for re-refineries to expand operations. However, improper oil disposal practices by many individual vehicle owners and independent workshops continue to restrain effective collection. The high relative costs of setting up oil collection points and advanced recycling technologies also pose challenges, especially in developing markets. Stringent quality norms and competition from crude-derived products further add to operational difficulties. Overall, the growing emphasis on sustainability and the circular economy presents significant prospects for market participants. Collaboration with governments, industry associations, and local communities can help unlock potential through accessibility and standardization. Technology advancements to upgrade fuel quality from used oils also provide means to overcome restraints.

Recent Developments:

New product launches:

• In 2022, Shell is a multinational oil and gas company launched used oil management practices to re-refined and dispose of used oil.
• In June 2022, Safety-Kleen introduced BRAND OF BASE OILS, 10 kg of carbon dioxide are prevented from being released while using re-refined base oil instead of a regular refining procedure.

 Acquisition and partnerships:

• In September 2022, Heritage-Crystal Clean acquired Enevo's used oil collection business in Finland. This expanded its collection network in Europe.
• In February 2021, Safety-Kleen acquired McKenna Environmental's used oil collection assets in Canada. It increased Safety-Kleen's customer base and infrastructure.
• In December 2020, FCC Environmental partnered with Nexus Fuels to supply recycled base oils. The partnership enhanced both companies' circular economy credentials.

Figure 2. Global Automotive Oil Recycling Market Share (%), by End-use Industry, 2023

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Top companies in Automotive Oil Recycling Market:

• Safety-Kleen Systems, Inc.
• Valvoline
• Heritage-Crystal Clean, LLC
• Veolia Environnement
• Clean Harbors
• NexLube
• Universal Lubricants
• Vertex Energy, Inc.
• Delta-Energy Group, LLC
• GFL Environmental Inc.
• HCC Eagle Environmental Services, Inc.
• MidStates Oil Refining Co. LLC
• PetroChoice
• Solventis Ltd.
• Southern Oil Refining Pty Ltd
• Texas Used Oil Collection Program

*Defination: The automotive oil recycling market refers to the industry that involves the collection, processing, and reuse of used automotive oil. This market is driven by the need to conserve resources, reduce pollution, and provide cost-effective and environmentally friendly solutions for automotive waste. The process of recycling involves removing impurities, contaminants, and used additives from the used oil so that it can be reused in vehicles or other applications. This market includes various stakeholders such as recycling facilities, automotive service providers, oil manufacturers, and regulatory bodies.