Extended Producer Responsibility (EPR) for Used Oils

Overview of EPR for Waste Oil

The Ministry of Environment, Forest and Climate Change (MoEFCC) under the Central Government has released a draft amendment to the Hazardous Waste Management Rules, incorporating provisions for Extended Producer Responsibility (EPR) concerning Used Oil. Effective from April 1, 2024, this amendment will regulate manufacturers, importers, and recyclers of waste oil. Previously, the government also introduced EPR for Tyre Waste in 2022. These additions to India's EPR framework underscore the nation's commitment to environmental protection, highlighting EPR as an effective solution to manage industrial waste and mitigate environmental impact.

While the core concept of the EPR Policy is straightforward, implementing it effectively requires tailored rules for managing various types of waste, such as Used Oil. The central government, empowered by the Environment Protection Act of 1986, has authority to formulate pollution control regulations. It has utilized this authority to draft rules specifically for Extended Producer Responsibility (EPR) concerning Used Oil. Before final implementation, these drafts must be published in the Gazette of India. During this period, stakeholders can raise objections and provide feedback on the proposed rules. The government carefully reviews and considers relevant suggestions received during this consultation phase.

What constitutes Used Oil?

Used Oil is categorized under Rule 3 of the Hazardous Waste Management Rules of 2016. Sub-rule 36 of Rule 3 specifies,

Used oil refers to any oil derived from crude oil or synthetic oil mixtures, including spent oil types such as used engine oil, gear oil, hydraulic oil, turbine oil, compressor oil, industrial gear oil, heat transfer oil, transformer oil, and their associated tank bottom sludges. This oil is suitable for reprocessing if it meets the specifications outlined in Part A of Schedule V, excluding waste oil.

Part A of Schedule V in the Hazardous Waste Management Rules of 2016 sets specific limits and parameters that oils must meet to qualify as used oil. These parameters encompass Polychlorinated Biphenyls (PCBs), Lead, Arsenic, Cadmium, Chromium, Nickel, and Polyaromatic Hydrocarbons (PAHs).

Significance of EPR Compliance in Managing Used Oil

Before these regulations, the central government established Extended Producer Responsibility (EPR) rules for managing E-Waste, Plastic Waste, Tyre Waste, and Battery Waste. With the introduction of this amendment to the Hazardous Waste Management Rules, India will now have five EPR policies addressing various waste types. The new EPR regulations for Used Oil aim to enhance the management of used oil and regulate stakeholders involved. This initiative supports environmental goals by implementing a comprehensive approach to handle used oil generation, contributing to India's progress towards a circular economy and sustainable development.

Entities mandated to register for EPR regarding Waste Oil

Producers
Collection Agents
Recyclers
Used Oil Importers

If you are involved in selling base oil or lubrication oil anywhere in India, you are considered a producer under these regulations. The source of this oil can be international or domestic manufacturers and distributors. Producers may sell through various channels including dealerships, retail outlets, and online platforms. Collection agents gather waste oil from diverse sources and deliver it to registered recyclers. Recyclers are involved in the recycling process of used oil, while Used Oil Importers bring it in from overseas markets.

Advantages of Obtaining EPR Authorization for Used Oil

While the implementation date for EPR regarding Used Oil is still ahead, its completion promises significant positive impacts on both the environment and related industries. Here are some key benefits of EPR for Waste Oil:

It contains toxic chemicals such as benzene, lead, zinc, and cadmium. Proper treatment will prevent these harmful substances from mixing and contaminating the environment.
High oil consumption leads to greenhouse gas (GHG) emissions. Alternatives will reduce oil consumption and mitigate rising GHG emissions in the environment.
This will mitigate global climate change impacts and decrease carbon footprints in the ecosystem.
Using re-refined oil will alleviate pressure on petroleum reserves by reducing overall demand for crude oil.
Including this new waste type in India’s EPR framework will advance progress toward sustainable development goals and a circular economy.
Besides environmental benefits, there are economic advantages, as refining used oil consumes only one-third of the energy needed to refine crude oil.

Responsibilities of Stakeholders in Waste Oil EPR

Stakeholders involved in used oil management must adhere to specific responsibilities outlined in the latest amendment to the Hazardous Waste Management Rules, which introduces the EPR framework for Used Oil. Key responsibilities include:

Producers must obtain EPR Registration for Used Oil via the CPCB Portal and meet their EPR Targets.
They are responsible for organizing the collection, transportation, and storage of used oil.
Producers must provide contact information via their website or other channels to facilitate collection processes.
Producers, collection agents, importers, and recyclers are required to submit quarterly and annual returns via the online portal prior to the specified deadlines.
Producers should conduct awareness campaigns using available communication channels.
Collection Agents are tasked with collecting used oil from generators and delivering it to recyclers or producers.
Collection Agents are tasked with collecting used oil from generators and delivering it to recyclers or producers.

In addition to the primary stakeholders, other involved parties must fulfill their respective roles and collaborate for compliance with the Used Oil EPR framework. These parties encompass bulk generators, CPCB, SPCB, PCC, local bodies, and the Bureau of Indian Standards (BIS).

Documentation Needed for Used Oil EPR Compliance

EPR is not a simple document submission process; rather, it's a comprehensive regulatory framework involving multiple steps. EPR for Used Oil assigns various responsibilities to different parties, and compliance entails fulfilling these responsibilities and meeting specified conditions. It's advisable to keep the following documents readily accessible, as they may be required at any stage:

ID and Address Proof of the Authorised Persons
Business Registration (CIN, MoA, Partnership Deed, MSME, etc.)
PAN and GST Details
Import Export Code
Details of Manufacturing
EPR Plan to fulfill the targets
Details Regarding the Manufacturing
Details Regarding the Annual Returns
Data Regarding the Generation of Used Oil

These documents may be necessary for registering your entity, obtaining the EPR Certificate, securing EPR Certification for waste oil, filing returns, and other related processes.

Procedure for EPR Compliance with Used Oil

The 2023 amendment to the Hazardous Waste Management Rules outlines regulations for EPR concerning Used Oil and specifies a series of tasks that producers must complete. Throughout the process, producers navigate through several stages as detailed below:

Registration of Parties :

Producers, importers, collection agents, and recyclers are required to register on the Central Pollution Control Board's web portal. Conducting business without EPR Registration or engaging with unauthorised parties is prohibited. CPCB imposes annual maintenance charges, and entities fulfilling multiple roles must register separately for each role they perform.

EPR Objectives for Producers and Importers of Base Oil :

Producers and importers receive EPR targets based on the volume of used oil sold in a given financial year. These targets aim to ensure efficient recycling of waste oil and prevent its accumulation in circulation. EPR regulations for Used Oil will be effective from April 1, 2024, marking the beginning of a new financial year. Sales of base oil and lubrication oil in the financial year 2022-2023 will determine the EPR target for 2024-2025, while activities in 2023-2024 will influence the target for 2025-2026. These targets start at 10% and incrementally increase to 60%. Below is a table illustrating the EPR targets for base oil and lubrication oil producers in upcoming years:

EPR Objectives for Producers and Importers of Base Oil :

During production at the producer's plant, raw materials pass through various machines and equipment. Some raw material is lost during these operations, resulting in the final product not being a hundred percent of the initial raw material quantity. The Central Pollution Control Board considers this operational loss and adjusts the producer's EPR target accordingly.

EPR targets for Importers of Used Oil :

For importers directly importing used oil, the EPR obligation is set at 100% of the previous year's import volume. They must recycle the entirety of their imports from 2023-2024 during the financial year of 2024-2025. Importation of used oil is strictly permitted only for re-refining purposes. Importers found importing waste oil for other purposes may face cancellation of their registration by the Central Pollution Control Board, along with appropriate enforcement actions.

EPR Certification for Used Oil :

The process of proving compliance with EPR targets involves obtaining EPR Certificates. Producers of used oil must purchase these certificates from recyclers whenever they supply used oil for recycling purposes. Recyclers must be registered on the Central Pollution Control Board's portal, as per regulations prohibiting transactions with unregistered entities. These certificates, known as EPR for Used Oil certificates, document the quantity of recycled waste oil. CPCB references this quantity during audits to verify a producer's EPR compliance.

Audit of EPR Certificates for Used Oil :

Producers and recyclers must adhere strictly to regulations, as any attempt to circumvent them will be detected by the Central Pollution Control Board (CPCB). Both parties are required to submit annual and quarterly returns and reports. The CPCB maintains comprehensive records, and in case of discrepancies, the lower figure will be considered authoritative. Environmental audits are also mandated to validate the data submitted by stakeholders. The CPCB or authorized third parties conduct these audits to verify EPR compliance.

Restrictions on Acquiring EPR Certificates for Used Oil :

Producers are restricted from purchasing additional EPR Certificates once they have fulfilled their EPR obligations. The portal maintains comprehensive records, tracking both EPR obligations and the quantity of EPR Certificates purchased by producers. If a producer still has unmet EPR obligations, they may purchase EPR Certificates up to the limit of that outstanding obligation. Additionally, they can acquire up to ten percent of their current financial year’s EPR liability for Used Oil as additional certificates. The CPCB's web portal facilitates these transactions and allows producers and importers to monitor their liabilities. Each EPR Certificate purchase is promptly deducted from the producer's Used Oil EPR liability on the portal.

Cost, Duration, and Renewal of EPR Certification for Used Oil :

Producers fulfill the costs associated with EPR Compliance for Used Oil through purchasing EPR Certificates and paying annual maintenance fees to the CPCB for EPR Authorization. CPCB updates and renews EPR targets annually, providing producers with new targets based on previous year's overdue obligations, sales made, and certificates purchased. This calculation process determines obligations for each new year, repeating annually.

Environmental Compensation in the Context of EPR for Used Oil :

Producers are required to pay environmental compensation if they fail to comply with the rules outlined in these regulations. However, paying this compensation does not absolve them of their EPR (Extended Producer Responsibility) obligation; they must still recycle the used oil and meet their targets. Upon fulfilling their EPR target, producers may receive a partial refund of the amount paid, depending on the duration it took them to fulfill their overdue obligations. The circumstances in which a producer must pay environmental compensation include:

Non-fulfillment of EPR Obligations
Non-registration under these rules
Furnishing False information to get the registration
EPR Certificate is based on untrue information
EPR Certificate is based on untrue information
Use of false EPR Certificates
Use of false EPR Certificates

The CPCB is mandated to maintain funds received from environmental compensation in a dedicated escrow account. These funds are earmarked for purposes such as the collection, recycling, and disposal of neglected, uncollected, and unreprocessed waste oil. The CPCB retains the authority to determine alternative uses for these funds as well.

Frequently asked questions (FAQ)

Which authority or organization introduced the new EPR regulations for Used Oil?

The Central Government of India introduced the amendment to the Hazardous Waste Management Rules through the Ministry of Environment, Forest and Climate Change, incorporating provisions related to EPR for Used Oil.

Who has the authority to create regulations regarding extended producer responsibility?

The central government of India is responsible for formulating regulations to protect the environment and enforce extended producer responsibility (EPR). Section 25 of the Environment Protection Act of 1986 grants the central government this authority.

What role does EPR play in regulating used oil?

Used oil poses significant environmental contamination risks. In response, the government of India has implemented EPR policies for used oil, holding producers accountable for the oil they circulate. They must recycle and dispose of used oil according to the volume they introduce into the system.

What is defined as 'Used Oil'?

‘Used Oil’ refers to any oil derived from crude oil or synthetic mixtures, including spent oil, used engine oil, gear oil, hydraulic oil, turbine oil, compressor oil, industrial gear oil, heat transfer oil, transformer oil, and their tank bottom sludges. It must meet specifications in Part A of Schedule V for reprocessing, excluding waste oil.

Who qualifies as collection agents?

Collection Agents are business entities that gather used oil from generators and supply it to producers and recyclers.

Who is considered a producer under EPR regulations for used oil?

If you sell base oil or lubrication oil within India by any means, you are classified as a producer under the EPR regulations for used oil.

What are the responsibilities of producers?

Producers are tasked with EPR registration for used oil, meeting EPR targets, collecting, transporting, and safely storing used oil, sharing information with consumers, filing annual returns, and raising awareness about recycling and environmental pollution prevention.

What are the responsibilities of recyclers?

Recyclers are responsible for registering, adhering to waste management rules for processing, preventing environmental harm, disposing of generated residues, and filing annual and quarterly returns.

What are the duties of collection agents?

Collection agents must register on the CPCB portal, retrieve used oil from generators, deliver it to producers and recyclers, upload collection details for verification on the CPCB portal, and file quarterly and annual returns.

What responsibilities do importers have?

Importers are required to register on the Central Pollution Control Board portal, achieve EPR targets related to their imports, and submit annual returns via the portal.

What is the cost associated with EPR compliance for used oil?

The cost of EPR compliance encompasses various expenses, including EPR authorization, purchasing EPR certificates, and organizing awareness campaigns, among others.

What is the validity period of EPR certification for used oil?

EPR certificates purchased in a specific year are applicable only for that year, adjusted by the Central Pollution Control Board to match the EPR obligations of that period.

How can EPR certificates for used oil be renewed?

EPR certification for waste oil aligns with the EPR liability for used oil, recalculated annually. Each new year necessitates an assessment of EPR obligations under the EPR rules for used oil, followed by the purchase of corresponding EPR certificates.

What is Environmental Compensation?

Environmental Compensation is a penalty stipulated in waste management regulations. It is imposed by the CPCB on parties failing to comply with EPR provisions and environmental laws aimed at safeguarding the environment.

How is the amount received as Environmental Compensation utilized?

Managed by the Central Pollution Control Board, Environmental Compensation primarily funds the collection, recycling, and disposal of neglected waste. Additional uses may be designated by the CPCB.

Does the CPCB reimburse Environmental Compensation to producers upon fulfilling their obligations?

Yes, the CPCB refunds Environmental Compensation to producers who rectify their compliance gaps under EPR obligations. However, the amount refunded diminishes over time if obligations are not promptly met.

EPR FOR USED OIL