EPR For Used Oil

The Central Government through the Ministry of Environment, Forest and Climate Change (MoEFCC) notified the draft of an amendment to the Hazardous Waste Management Rules. This amendment added new provisions regarding the EPR for Used Oil which will come into force from the first of April 2024 and regulate the waste oil manufacturer, importer, and recyclers. In the previous amendment to the same rules, the central government introduced the EPR for Tyre Waste in 2022. By adding new kinds of waste into the EPR Regime of India, the Indian government is conveying a message that environmental protection is our utmost priority and EPR is proving to be an efficient and effective solution to deal with the waste our industries generate and pollute the environment.

Although the basic idea of the whole EPR Policy is very straight, there is a different requirement to deal with various kinds of waste to properly implement such a policy and therefore the need arises for separate rules concerning Extended Producer Responsibility for Used Oil. The central government has the power to make rules regarding pollution control by virtue of the Environment Protection Act of 1986. It exercised this conferred power and released the draft. It is necessary to publish it in the Gazette of India before the final implementation. During the period between the implementation and release of such a draft, anybody can object to this notification and submit his feedback. The government considers the suggestions received in this process if they are appropriate.

What Is Used Oil?

The Used Oil is defined under Rule 3 of the Hazardous Waste Management Rules of 2016. Sub-rule 36 of Rule 3 of the act prescribes,

“Used oil means any oil, (i) derived from crude oil or mixtures containing synthetic oil 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; and (ii) suitable for reprocessing, if it meets the specification laid down in Part A of Schedule V but does not include waste oil.”

The Part A of Schedule V of the Hazardous Waste Management Rules of 2016 prescribes certain limits and parameter an oil need to qualify before it is considered as used oil. These parameters include Polychlorinated Biphenyls, Lead, Arsenic, Cadmium, Chromium, Nickel, and Polyaromatic Hydrocarbons.

Before these rules, the central government published rules regarding the Extended Producer Responsibility for E-Waste, Plastic Waste, Tyre Waste, and Battery Waste. After the implementation of this amendment to the Hazardous Waste Management Rules, there will be five EPR Policies to manage various kinds of waste in India. The new EPR rules for Used Oil will help in the better management of used oil and regulation of the concerned stakeholders. It will help the environment by providing a holistic process for dealing with the generation of used oil. It will further help our country to move towards the goal of a circular economy and sustainable development.

Entities Required EPR Registration for Waste Oil

The EPR (Extended Producer Responsibility) for Used Oil applies to the following entities-

• Producers
• Collection Agents
• Recyclers
• Used Oil Importers

If by any means, you are offering to sell base oil or lubrication oil anywhere in the country, you are a producer for the purpose of these rules. The source of this lubrication oil or base oil can be foreign or other manufacturers and distributors. The selling methods used by the producer can be anything like dealership retailing and e-retailing. Collection Agents collect waste oil from various sources and supply it to registered recyclers. Recyclers engage themselves in the process of recycling used oil and the Used Oil Importers import it from the overseas market.

Although the date of implementation of EPR for Used Oil is far from now, when implementation is completed it will have many positive impacts on our environment as well as the related industries. Some of the important benefits of EPR for Waste Oil are as follows-

• It contains toxic chemicals like benzene, lead, zinc, and cadmium. If treated well, these harmful substances will not mix up and contaminate our environment.
• Massive consumption of oil triggers GGH (Green House Gas) emissions. The alternatives will decrease the consumption of oil and prevent GHG Emissions from rising in the environment.
• It will reduce the rate of global climate change and lower the carbon footprints in the ecosystem.
• The use of re-refined oil will relieve the petroleum reserves as the overall demand for crude oil will go down to some extent.
• The new addition of waste type to India’s EPR regime will move us closer to achieving our sustainable development goals and the circular economy.
• Apart from the environmental benefits, it will also result in some economic benefits as the energy consumption in the refining of used oil is only one-third of the energy required to refine crude oil.

Responsibilities of Stakeholders Under EPR for Waste Oil

Various stakeholders dealing in used oil need to fulfil the following responsibility as per the compliance mentioned under the latest Hazardous Waste Management Rules Amendment. This amendment talks about the EPR Regime for Used Oil. Some major responsibilities that need to be fulfilled are as follows-

• The producers need to get EPR Registration for Used Oil through the CPCB Portal and fulfil their EPR Targets.
• They should also make appropriate arrangements for the collection, transport, and storage of used oil.
• The producers should provide contact details through the website or any other medium to facilitate the collection process.
• The producers, collection agents, importers, and recyclers need to file annual and quarterly returns online using the portal before the deadline.
• Producers also need to spread awareness through the available means of communication.
• Collection Agents are responsible for the collection of used oil from generators and supply to recyclers or producers.
• Recyclers should use the recycling process as per CPCB guidelines.

Apart from these major stakeholders, other involved parties should also perform their respective duties and cooperate with each other for the fulfilment of the compliances as prescribed in this Used Oil EPR Regime. These other parties include bulk generators, CPCB, SPCB, PCC, Local bodies, and the Bureau of Indian Standards.

EPR is not one straightforward process to go submit a bunch of documents to get one. Instead, it is a regulatory framework and comprises many steps. EPR for Used Oil prescribes various responsibilities to many different parties. The EPR Compliance is to fulfill these responsibilities and adhere to the conditions prescribed. You should keep the following documents handy as you may need them 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

You may require these documents to receive the registration of your entity, purchase the EPR Certificate, get EPR Certification for waste oil, file the returns, etc.

The 2023 amendment in the Hazardous Waste Management Rules describes the rules regarding EPR for Used Oil and prescribes various tasks to fulfill. In the process, a producer goes through various stages which are mentioned below-

Registration of Parties

The producers, importers, collection agents, and recyclers need to register on the web portal of the Central Pollution Control Board. They should neither do any business without EPR Registration nor they can deal with any other party who did not get EPR Authorisation. The annual maintenance charges shall be levied by the CPCB and if an entity is playing more than one role then it requires to register itself separately for all the roles it is furnishing.

EPR Targets for Producers and Importers of Base Oil

The producers and importers get EPR Targets in respect of the used oil sold by them in a particular financial year. The object of setting up the EPR Target is to recycle waste oil efficiently and avoid any build-up in circulation. The EPR for Used Oil will be enforced from the first April of 2024. This is also the start of a new financial year. The base oil and lubrication oil sold by the producer in the financial year 2022-2023 will determine the EPR Target for the financial year 2024-2025. While the activities of the current financial year which is 2023-2024 will affect the EPR Target for the financial year 2025-2026. This target starts from 10 percent and gradually increases up to 60 percent. The table mentioned below shows the EPR Targets of base oil and lubrication oil producers for upcoming years-

In the plant of the producer, the raw material goes through various machines and equipment. In the process, some raw material is lost in the operations stage and the yielded product is not exactly hundred percent of the raw material. The Central Pollution Control Board takes this into account and reduces the EPR Target of the producer by a factor for the loss of base oil in the operational activities.

EPR Targets for Importers of Used Oil

If there is any importer who is importing used oil directly, he will have the EPR Obligation of 100% for the previous year’s import. He has to recycle a hundred percent of his 2023 - 2024 imports in the financial year of 2024 - 2025. It should also be noted that the import of used oil is only allowed for the purpose of re-refining. If any importer imports the waste oil for any other purpose then Central Pollution Control Board may cancel his registration and take appropriate action against such importer.

EPR Certification for Waste Oil

The EPR Targets are explained above but how a producer is supposed to prove that it has achieved its set target? For this reason, there is the provision of EPR Certificates. The producer of used oil needs to purchase a certificate from the recycler whenever, for the purpose of recycling, it supplies the used oil to the recycler. The recycler should be registered on the portal of the Central Pollution Control Board as the rules do not allow dealing with non-registered parties. The certificate thus received is called the EPR for Used Oil. It contains the details of recycled waste oil with the quantity and the CPCB uses this quantity for reference when it wants to audit the EPR Obligation of a producer.

Audit of EPR Certificates for Used Oil

The producers and recyclers should not act over-smartly as any discrepancy will be captured by the Central Pollution Control Board. The producers and recyclers both need to submit returns and reports on an annual and quarterly basis. The CPCB maintains all these records and in case of any discrepancy, the lower figure shall prevail. There is also a provision for an environmental audit that verifies the figures submitted by the parties. The CPCB or any other authorized third party can audit the EPR obligations of relevant parties.

Limitations on Purchase of EPR Certificates for Used Oil

A producer cannot purchase more EPR Certificates if he has already fulfilled his EPR obligation. The portal has all the records hence it tracks the EPR Obligations as well as the amount of EPR Certificates purchased by them. If a producer has some EPR Obligation left unfulfilled then he can purchase excessive amounts of the EPR certificate to the limit of that unfulfilled EPR Obligation only. Apart from this, he can also purchase an additional amount of EPR certificate which shall not exceed ten per cent of his current financial year’s EPR liability for Used Oil. The web portal developed and managed by the CPCB records every transaction. The producers and importers can track their liabilities on the portal. As soon as they purchase an EPR Certificate, the portal adjusts it against the Used Oil EPR liability of that producer.

The producer does not pay a single amount to fulfill the fee of EPR Compliance for Used Oil but he pays the cost of purchasing EPR Certificates and annual maintenance received by the CPCB for the EPR Authorisation. The CPCB renews the EPR Targets every year and the producer gets a new target. This new target depends on the overdue EPR Obligation of the Producer from the previous year, the new sales made by the producer in the last year and the certificates purchased by the producer in that year. The CPCB calculates this new target on these factors and the process to oblige against these new targets repeats once again every year.

Environmental Compensation under EPR for Used Oil

The producers are liable to pay environmental compensation if they do not adhere to the provisions prescribed in these rules. Even after they pay the compensation, it does not mean that they are free from their EPR (Extended Producer Responsibility) Obligation but they still need to recycle the used oil and fulfill the target. If the producer fulfills his EPR Target then he receives a portion of the amount paid by him. This portion depends on the time producer took to fulfill the overdue obligations. In the following circumstances, a producer needs to pay environmental compensation-

• Non-fulfillment of EPR Obligations
• Non-registration under these rules
• Furnishing False information to get the registration
• EPR Certificate is based on untrue information
• Issue of false EPR Certification for Waste Oil
• Use of false EPR Certificates
• Violation of any other condition set out by these rules

The CPCB should keep this amount received through environmental compensation in a separate escrow account. It can use this amount to collect, recycle and dispose of the waste oil which is unattended, uncollected, and unrecycled. The CPCB may decide on any other use of this amount.

We, at Corpseed, have a team having years of experience and extensive knowledge relating to various horizons of Environmental Laws and EPR Compliances applicable in India as well as the processes involved to fulfill the EPR Obligations. We perform desk-based research, documentation, and coordination to provide consultation to clients in establishing their businesses and fulfilling the necessities as prescribed by the applicable rules. For all your business needs, Corpseed acts as a one-stop solution.