The economics of waste oil recycling in the EU

Abstract

In 2018, 1.6 million tonnes of waste oil were collected in the European Union. About 61% of the waste oil was regenerated–i.e. it was turned into base oil again–and 39% followed energy recovery pathways either in the form of conversion to fuel or via direct incineration. Although the life-cycle literature largely agrees that regeneration outperforms energy recovery in the EU in terms of greenhouse gas emissions and societal costs, policies to boost regeneration and their socio-economic impacts remain underexplored. We fill this gap by discussing policies for managing waste oil flows and by systematically assessing their socio-economic impacts. We analyse different policies that would induce an increase in the regeneration rate of waste oil from the current 61% to either 70% or 85% and assess how the type and magnitude of impacts as well as their distribution across different actors varies, depending on the policy design. The policies lead to a net saving in terms of avoided societal costs and to moderate gains in employment. However, when accounting for estimated administrative costs, these benefits are likely insufficient to justify regulatory intervention.