India is at a pivotal juncture in its sustainability journey. With industrial expansion and a growing vehicular population, the nation now generates over 1.3 million tones of used lubricating oil annually—a volume projected to rise steadily. Yet, less than 15% of this hazardous waste is recycled formally, with the rest often mismanaged by informal sectors, leading to significant environmental and public health risks. To combat this, the Extended Producer Responsibility (EPR) framework for used oil, effective from April 1, 2024, marks a major regulatory shift toward sustainable resource management.
Understanding the EPR Framework
The EPR regulation mandates that producers and importers of lubricating oils are responsible for the collection and environmentally sound recycling of used oils in proportion to their market share. Overseen by the Central Pollution Control Board (CPCB) through a digital portal, this framework is designed to gradually scale up recycling efforts across India:- FY2025: 5% of oil sold in FY2023 must be recycled- FY2031: Target ramps up to 50%- Compliance is ensured through the purchase of EPR certificates from registered recyclers
Why This Matters
The improper handling of used oil leads to soil and water contamination, toxic emissions, and a missed opportunity to reduce India’s reliance on imported virgin base oils—which currently make up 60–80% of the base oil requirement.
In contrast, re-refining offers a far more efficient and sustainable option:
Re-refining one gallon of used oil produces ~2.4 litres of lubricant, while producing the same from crude oil requires ~159 litres.Re-refining just 10% of India’s used oil can save ~1 million tonnes of GHG emissions annually.Re-refining consumes one-third of the energy required to refine crude oil, and reduces dependence on fossil fuel imports.
Lifecycle of Used Oil: From Consumption to Circularity
The used oil ecosystem functions as a closed-loop system that maximizes resource efficiency. Here's a simplified view of how used oil is reintroduced into the economy through a circular pathway: 1. Production: Lubricants are manufactured using virgin or recycled base oils.
2. Consumption: Lubricants are used across automotive, industrial, and commercial sectors.
3. Used Oil Generation: Post-usage, oils degrade and are considered hazardous waste.
4. Collection: Authorized collectors gather used oil from generators (e.g., workshops, industries).
5. Re-Refining: Used oil is processed into high-quality Re-Refined Base Oil (RRBO).
6. Reuse in Production: RRBO is reintegrated into lubricant production, closing the material loop.
Key Challenges in the Current Ecosystem
Despite the potential, India’s used oil sector faces systemic barriers:
-Informal dominance: Over 40% of used oil flows through unregulated channels like roadside mechanics and small garages. Fragmented collection: Cash transactions, under-reporting, and absence of traceability hinder formal recycling efforts. Inconsistent quality: Without proper segregation and testing, RRBO often fails to meet the quality of virgin base oil.-Low market incentives: RRBO is often more expensive than virgin oil, limiting its market acceptance. Strategic Roadmap: Recommendations from RECEIC–FICCI–Deloitte
To build a sustainable circular ecosystem, the roadmap is segmented into short-, medium-, and long-term priorities:
Short-Term (FY25–FY26):- Establish a National Used Oil Management Association.- Mandate digital registration for bulk generators.- Deploy a robust track-and-trace system.- Audit and tier existing recyclers to streamline quality.
Medium-Term (FY27–FY28):- Expand formal collection to the unorganised sector.- Financial support for re-refining tech upgrades.- Establish regional testing infrastructure and launch awareness drives.
Long-Term (FY29 onward):- Regulatory reforms and investments in advanced re-refining tech.- Enhanced incentives for high-quality RRBO.- Gradual formalization of informal collectors into mainstream.
What It Means for Stakeholders
Producers & Importers: Must align business practices with rising EPR targets and purchase EPR certificates.
Industrial Users: Should collaborate with authorized collection agents and maintain transparent records.
Recyclers & Collectors: Must register on CPCB portal and upgrade quality to produce RRBO meeting BIS standards.
Policymakers: Need to incentivize RRBO usage and formalize the supply chain to promote a circular economy.
Conclusion
India’s EPR framework represents a major leap forward for circularity in the used oil sector. With concerted efforts from industry, government, and citizens, used oil can shift from an environmental liability to a critical resource.
Source: ADVANCING INDIA'S SELF-RELIANCE: ENHANCING CIRCULARITY IN USED OIL MANAGEMENT - RECEIC & FICCI
Link for the report: https://receic.com/wp-content/uploads/2025/04/Circularity-in-Used-Oil-sector.pdf