United States Re-refined Base Oil Market Outlook and Forecasts, 2022-2027 - ResearchAndMarkets.com

The "U.S. Re-refined Base Oil Market- Industry Outlook and Forecast 2022-2027" report has been added to ResearchAndMarkets.com's offering.

Group II is the largest U.S. re-refined base oil market segment

The market for re-refined base oil is divided into three segments respect to their Group, Group I, Group II, and Group III. Group II-refined base oil is expected to dominate the market during the forecast period and witness higher growth.

Automotive and industrial lubricant manufacturers prefer group II re-refined base oil over the Group I due to the low sulfur content, volatility, and viscosities. The increasing demand for automobiles, growth of aviation, and commercial road transport, in the U.S. are expected to contribute to the growing demand for group II re-refined base oil products in the U.S.

Hydrotreating is the largest segment and is projected to witness similar growth during the forecast period owing to its ability to deliver quality base oil products more than other processes. It improves base stock quality, color, and color stability and also reduces the level of sulfur, nitrogen, halogen, oxygen, and metals compounds. It is primarily used to produce group II base oil.

Automotive oil is the largest and fastest-growing segment in the re-refined base oil market.

Re-refined base oils are primarily used across automotive oil, industrial oil, process oil, grease, metalworking fluid, and hydraulic oil. In the future, automotive oil is also expected to dominate the market during the forecast period. Automotive engine oil is designed for light, medium, and heavy commercial vehicles, passenger cars, and two- and three-wheelers. Automotive oil plays a vital role in engine performance, protecting against wear and tear of moving parts in an engine.

The U.S. automotive industry is one of the largest and most successful industries globally. In 2020, the country reported production of around 8.8 million vehicles. Similarly, as per the American Automotive Policy Council data, motor vehicle production will increase to an average of 12 million vehicles per year through 2025. Thus, presenting a significant opportunity for the automotive oil products in the U.S.

The Southern US region was the second largest and is forecasted to be the fastest-growing market for re-refined base oil from 2022 to 2027. Texas and Florida led the region. The demand for re-refined base oil in Southern US is driven by stringent regulations concerning waste oil, emission regulation, and the growing trend of sustainability aspect. In addition, the booming automotive industry, manufacturing, and construction industry are also supporting the market growth.

BMW, Ford Motor, General Motors, Nissan Motor Company, Kia Motors, and Toyota Motor Corporation are some automotive players operating in the Southern region of the U.S. and consume a significant chunk of base oil.

MARKET INSIGHTS

Re-refining of used base oil is a process that removes all impurities, including dirt, additives, and water, from used oil through methods such as vacuum distillation, hydrotreating, clay treatment, and solvent extraction technology. These waste oils are collected from garages, maintenance shops, automotive companies, and marine industries and are taken to a refinery and are re-refined to produce Group I, Group II, and Group III base oil.

The U.S. re-refined base oil market is an established market owing to the well-established infrastructure for the collection of used oil and the continuous effort of the government to reduce its carbon footprint. Over the last decade, used oil collection has grown significantly in the U.S., driven by stringent policies by respective states and the U.S. Environmental Protection Agency (EPA), including the Resource Conservation and Recovery Act (RCRA), which regulates the management of hazardous and non-hazardous waste. According to the U.S. Department of Energy (DOE) data, around 30% of the used oil collected is re-refined as a base oil in the U.S.

MARKET TRENDS & DRIVERS

Preserve Energy & Natural Resources

Preservation of natural resources is one of the prime factors leading to the broader acceptance of the re-refining process across the U.S.

With the increasing population, industrialization, and modernization, the consumption of natural resources such as fossil fuels is increasing. However, the continuing depletion of fossil fuels (crude oil) can lead to scarcity and undermine economic activity. In addition, the burning of fossil fuels results in air pollution.

Therefore, the growing awareness among the population for preserving the environment leads to adopting environment-friendly processes to produce base oil. The use of a re-refined base oil process is helping to slow down the depletion of crude oil, save energy and restrict environmental pollution. Because waste oil, rather than crude oil, is used in the re-refining process to produce base oil. Thus, in this way, it preserves the energy & natural resources.

Increasing U.S. regulation regarding re-refining of used oil

With the increasing sustainability trend across the energy and transportation sector, reducing carbon footprint, and rising demand for premium base oil, the refining base oil process is gaining momentum.

The growing trend regarding environmental sustainability has changed the perception of used oil management. Hence, consumers have become reluctant to dispose of used waste oil in sewage or waterways or burn it off. However, the burning of used oil continues, especially in undeveloped or developing nations, due to the lack of awareness and proper collection unit of waste.

Therefore, several local and national governments have implemented various management and regulatory programs to encourage the collection and refinement of used oil through incentives, legislation, and penalties, based on the problem and how best to collect and manage used oil.

High Cost of Processing Used Base Oil

One of the major restraints hindering the market's growth is the processing cost of used base oil.

Overall, the re-refining process encompasses two significant steps (collection of waste oil & manufacturing of it, which involves the installation of a sophisticated manufacturing unit), which makes the cost of operation high, thereby resulting in inflated product cost. The price of a product plays a significant role in the purchase decision of individuals. An individual evaluates the following two costs while purchasing a product in the market.

COMPETITIVE STRATEGIES

The competitive scenario in the U.S. re-refined base oil market is currently intensifying. Heritage-Crystal Clean, Vertex Energy, Puraglobe, and Safety-Kleen Systems are a few prominent players.

The U.S. re-refined base oil is one of the consolidated markets across the verticals of base oil. The market has comparatively low entry barriers that push vendors to consider innovation and differentiation in their client offerings. Vendors usually gain an edge over their competitors through differentiated offerings, ranging from updating the product feature to adopting a region-specific market expansion strategy.

The major companies operating in the market are Safety-Kleen Systems (Wisconsin, U.S.), Heritage-Crystal Clean (Illinois, U.S.), Amalie Oil company (Florida, US), Puraglobe (Florida, US), Evergreen Oil (Clean Harbour Inc) (California, U.S.), and Vertex Energy (Texas, U.S.) among others. These companies continually compete for the leading position in the market, with ongoing competition from local vendors.

Key Vendors

• Heritage-Crystal Clean
• Safety-Kleen System
• Universal Environmental Services
• Universal Lubricants
• Vertex Energy

Other Prominent Vendors

• AGC Refining & Filtration
• Amalie Oil Company
• Combo Lube
• Evergreen Oil
• Emerald
• Hicks Oil
• Noble Oil Services
• Puraglobe
• Rock Oil Refining
• Recoil

Key Topics Covered:

1 Research Methodology

2 Research Objectives

3 Research Process

4 Scope & Coverage

4.1 Market Definition

4.2 Base Year

4.3 Scope of the Study

5 Report Assumptions & Caveats

5.1 Key Caveats

5.2 Currency Conversion

5.3 Market Derivation

6 Market at a Glance

7 Introduction

7.1 Overview

7.2 Value Chain

7.3 Us Regulations on Used Lubrication Oil

8 Market Opportunities & Trends

8.1 Conserving Energy & Natural Resources

8.2 Demand for High-Quality Base Oil for Lubricant Formulation

9 Market Growth Enablers

9.1 Increasing Re-Refining Capacity & Collection of Used Oil in US

9.2 Increasing State Regulations in Re-Refining Used Oil

10 Market Growth Restraints

10.1 High Cost of Processing Used Base Oil

10.2 Collection and Changing Seasonality of Used Base Oil

11 Market Landscape

11.1 Market Overview

11.2 Geographic Insights

11.3 Pest Analysis

11.4 Market Size & Forecast

11.5 Five Forces Analysis

12 Group

12.1 Market Snapshot & Growth Engine (Value)

12.2 Market Snapshot & Growth Engine (Volume)

12.3 Market Overview

12.4 Group I

12.5 Group II

12.6 Group III

13 Technology

13.1 Market Snapshot & Growth Engine (Value)

13.2 Market Snapshot & Growth Engine (Volume)

13.3 Market Overview

13.4 Clay Treatment

13.5 Vacuum Distillation

13.6 Solvent Extraction

13.7 Hydrotreating

13.8 Others

14 Application

14.1 Market Snapshot & Growth Engine (Value)

14.2 Market Snapshot & Growth Engine (Volume)

14.3 Market Overview

14.4 Automotive Oil

14.5 Process Oil

14.6 Industrial Oil

14.7 Metalworking Fluid

14.8 Grease

14.9 Others

15 Region

15.1 Market Snapshot & Growth Engine

15.2 Region Overview

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