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The re-refined base oils market size is estimated to grow by USD 2.64 billion, at a CAGR of 6.78% between 2023 and 2028. The market's expansion is driven by several critical factors. Firstly, there is an increasing demand for high-quality oils that offer lower environmental impact, reflecting a broader environmental consciousness among consumers and businesses. Secondly, in the Asia-Pacific (APAC) region, there is a growing preference for re-refined oils due to their environmental benefits and cost-effectiveness, driving market growth in this geographical area. Thirdly, there is a rising global demand for cost-effective alternatives across various industries, prompting companies to seek efficient and sustainable oil solutions. These factors underscore a shift towards more sustainable practices and economic considerations in usage. As industries adapt to these trends, the market for oils is poised for continued expansion, supported by innovation in recycling technologies and heightened environmental awareness worldwide.
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The market is witnessing significant growth due to the increasing demand for sustainable and eco-friendly lubricants. Re-refined base oils are derived from used lubricating oils through various processes such as vacuum distillation, solvent extraction, and hydrotreating. These base oils find extensive applications in various sectors, including automotive, industrial, and process industries. In the automotive sector, re-refined base oils are used to manufacture engine oils, transmission oils, gear oils, and transformer oils. In the industrial sector, they are used as process oils, metalworking fluids, and other applications. The marine industry also utilizes re-refined base oils for various applications. The market for re-refined base oils is driven by several factors, including the growing demand for sustainable lubricants, the increasing awareness of environmental concerns, and the availability of incentives and penalties for using re-refined base oils. The market is expected to grow at a steady pace due to the increasing adoption of solvent extraction technology and hydrotreating process in the refining of used lubricating oils. Garages and maintenance facilities are also contributing to the growth of the market by offering re-refined base oils as an alternative to virgin base oils. The market is expected to remain competitive with various players using different technologies such as clay treatment, vacuum distillation, and other technology to produce high-quality re-refined base oils.
The rise in demand for high-quality oils with lower environmental impact is the key factor driving the growth of the market. Some of the factors contributing to the demand are increasing concerns over environmental pollution, increased awareness about environmentally sustainable business practices, and the need for cost-effective solutions. One of the main drivers of this trend is the rising environmental awareness among consumers and businesses. People are becoming more aware of the negative effects of conventional oil production and disposal methods and are actively seeking alternatives with lower environmental impact. Re-refined base oils are the perfect solution to this problem, as they are made by recycling through a rigorous refining process.
Moreover, cost-effectiveness will play an important role in driving the demand. The initial investment in a re-refining plant can be relatively high, but the long-term benefits outweigh the costs. Re-refined base oils are proven to provide performance. Some countries have introduced policies mandating the use of environmentally friendly oils in certain sectors, such as transportation. This regulatory push and financial incentives are driving the market as companies realize the economic benefits of switching to sustainable alternative products. Therefore, these factors are expected to increase the demand, which is expected to boost the growth of the global market during the forecast period.
Favorable government regulations promoting the use of recycled and re-refined oil products are the major market trends. These regulations make a supportive environment for the development and growth of the re-refining industry, ultimately leading to a more sustainable and environment-friendly approach to oil consumption. For instance, government regulation in the Renewable Fuel Standard (RFS) in the US. Under this regulation, a certain volume of renewable fuels, including re-refined solutions, must be mixed into transportation fuel each year. As a result, the market has experienced significant growth in the US, with several re-refining companies expanding their operations to meet the rising demand.
Furthermore, in Australia, the government has implemented the Product Stewardship (Oil) Act, which aims to reduce the environmental impact of oil consumption. This act requires companies and importers to participate in a PSO scheme, which includes the collection and recycling of used oils. This regulation encourages the use of re-refined base alternatives and provides a sustainable solution for managing used oil. Hence, the above-mentioned factors are expected to grow the demand, which will boost the growth of the market during the forecast period.
The costly recycling process is the key challenge that impedes the growth of the market. Recycling used industrial oils to produce recycled base alternatives is an environmentally friendly solution that reduces waste and conserves natural resources. However, the high costs associated with this process continue to be a barrier to widespread adoption. A major cost factor in the recycling process is the collection and transportation of waste oil. Collecting waste oil from various sources requires special infrastructure and personnel, increasing overall costs.
Moreover, transporting waste to recycling plants is costly, especially when large volumes of waste oil have to be transported over long distances. Another cost factor in the recycling process is the treatment and purification of the used oil collected. In addition, market prices also affect recycling costs. When global oil prices are low, it is more economical for producers to invest in fresh oil than to recycle used industrial oil. Thus, this costly process and factors will impede the growth of the market during the forecast period.
The market growth analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ADVANCED LUBRICATION SPECIALTIES: The company offers re-refined base oils for transmissions, final drives, and hydraulic systems of all major brands of tractors and other farm equipment using a common fluid reservoir.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Group I segment is estimated to witness significant growth during the forecast period. Group I segments are used in various industry segments, such as automotive, transportation, and manufacturing. One key advantage of the Group I segment is its high viscosity index, which refers to the oil's ability to resist changes in viscosity owing to variations in temperature. Therefore, it is suitable for applications where temperature fluctuations occur frequently, such as motor oil. For example, when starting a vehicle in cold weather, the oil must flow easily for proper lubrication, and Group I works well in those situations.
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The Group I segment was the largest and was valued at USD 2.70 billion in 2018. The Group I segment of the market is experiencing significant growth owing to rising demand for sustainable and environmentally friendly solutions. For example, automakers are increasingly using processed Group I segments in their vehicles to meet emission standards and improve fuel efficiency. Additionally, the transportation industry is realizing the benefits of using re-refined base solution in their vehicles as they help reduce costs as well as emissions. Therefore, such factors are expected to increase the adoption of the Group I segment in the market during the forecast period.
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APAC is estimated to contribute 45% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Factors such as the region's booming economy, population growth, and increasing environmental consciousness with its expanding industrial and automotive sectors are driving the adoption of re-refined base oils in APAC. One of the primary factors contributing to the market in APAC is the region's heavy dependence on oil imports for its energy needs. APAC countries such as India and China have increased demand for reclaimed base oils owing to their large populations and rapid industrialization. These countries have introduced stringent environmental regulations, promoted sustainable practices, and the adoption of re-refined oils to meet their lubricant needs. These factors have been successful in catering to the rising demand in APAC and will notably contribute to the growth of the market in APAC during the forecast period.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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Re-refined base oils are derived from the recycling process of used lubricating oils, such as engine oils, transmission oils, gear oils, transformer oils, and turbine oils. These base oils undergo various processing techniques like fractionation, distillation, and re-refining techniques, including acid & clay treatment, propane extraction, flash distillation, de-metallization & hydro-processing, to remove contaminants and produce high-quality base oils. The market for re-refined base oils is driven by the increasing demand for lubricants in mechanical devices, particularly in the automotive oil applications sector. Base oils are essential components of engine oils, transmission oils, and other lubricants used in automobiles.
In addition, the re-refining techniques help extend the lifespan of base oils, reducing the need for virgin crude oil and minimizing the environmental impact of oil extraction and disposal. However, the re-refining process oil faces challenges such as the presence of solid contaminants, water, and fuel in waste lube oils, which require effective cleaning and processing. The energy-intensive nature of re-refining techniques and the drawbacks of using lower-grade base oils like group I base oil, group II base oil, and group III base oil also pose challenges to the market's growth. Despite these challenges, the market for re-refined base oils is expected to grow as the demand for sustainable and cost-effective lubricant solutions continues to rise.
Market Scope |
|
Report Coverage |
Details |
Page number |
183 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.78% |
Market Growth 2024-2028 |
USD 2.64 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.23 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 45% |
Key countries |
US, China, Germany, France, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ADVANCED LUBRICATION SPECIALTIES, AVISTA OIL Deutschland GmbH, Biosynthetic Technologies, Clean Harbors Inc., Cleanaway Waste Management Ltd., COSAN S.A., Emerald Transformer, GFL Environmental Inc., Heritage Crystal Clean Inc., Hydrodec Group plc, Itelyum Regeneration S.p.A., Lwart Solucoes Ambientais, Neste Corp., Nynas AB, PetroChoice, PURAGLOBE Germany GmbH, ReGen III, Rock Oil Refining Inc., Shell plc, and Vertex Energy Inc. |
Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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