AVISTA OIL and IFP Petro announce oil re-refining collaboration

AVISTA OIL, a leading provider in the used oil re-refining industry, headquartered in Uetze, Germany, has partnered with Indian company IFP Petro to drive sustainability in India’s base oil industry. This collaboration has already achieved significant milestones, including developing a business model for a state-of-the-art used oil refinery with a capacity of 100,000 tonnes per annum (TPA) to reprocess waste oil into regenerated base oil.

Through collaborative efforts, AVISTA OIL and IFP Petro have made significant strides in several key areas:

Expertise Sharing: Both companies have actively exchanged knowledge on used oil mechanisms and best practices, integrating global insights into local operations to enhance efficiency and effectiveness.

Regulatory Collaboration: Together, they have worked on shaping the regulatory landscape, ensuring seamless implementation of regulations to foster industry growth. This involved dialogues with government bodies and international development agencies.

Operational Feasibility: They have jointly assessed the viability of product and service exchanges, exploring diversification opportunities and leveraging each other’s strengths to enhance operational capabilities.

Promotion of EPR Regime: AVISTA OIL and IFP Petro have been advocating for the Extended Producer Responsibility (EPR) regime, recognising its critical role in the responsible management of used oil, and emphasising its importance within their networks.

Challenges and the need for Viability Gap Funding

AVISTA OIL and IFP Petro have identified the necessity for Viability Gap Funding (VGF) to ensure the economic feasibility of their ambitious used oil refinery project. The current market presents several challenges, such as high raw material costs, low base oil prices, and an underdeveloped collection ecosystem. Additionally, there are uncertainties around market awareness and acceptance of the project.

To align with India’s environmental goals and based on precedents from other countries, financial assistance through a dedicated re-refining scheme could bridge the viability gap. This support would enable the development of a long-term business plan for managing used oil in India.

Call for active support from stakeholders

The partners are calling for active support from stakeholders, including oil producers and OEMs, to build a comprehensive ecosystem for used oil collection and re-refining. The partnership aims to create a sustainable future for India’s oil industry through continued collaboration and innovation.