In Europe ca 2.000.000 tons of oily-water mixtures are collected from seagoing ships. Ca 1.500.000 tons is collected by EUROSHORE members. As a result Euroshore represents ca 75% of the market. The collected oil-water mixtures are de-watered and further processed. This results in an annual production of ca 500.000 tons of processed oil (sometimes called dry oil). This oil is delivered to licensed companies that have a permit to buy this oil. Well known clients are cement kilns, waste incinerators, metallurgy. These companies are allowed to co-incinerate up to 40% of the recycled oil within their emission standards. If they would burn more recycled oil, than they have to follow the more strict emission standards for the burning of ‘waste’.
The alternative could be that our PRF’s produce a “product” via a specialized refining process. The problem is that within Europe there is not yet an “end of waste” framework for this type of fuels. As a result, we are confronted with national legislation in a few EU-countries that have worked out quality parameters for the waste oil, to be met, before it can be accepted as a “product”.
EUROSHORE members collect oily water mixtures with trucks or barges, in most cases in a 24/7 operation. After collection the oil water mixtures are stored in a settlement tank and treated (de-watering the oil mixtures and remove some pollutants). The processed oil is stored again and transported to licensed facilities for incineration or to be burned as an additional fuel. This complete process is capital and labor intensive and as a result the cost of the recycled oil is rather high and almost close to the price of “new oil”.
In Europe, only a few installations are permitted to produce (marine) fuels out of these residues. At this moment, it is practice that is not allowed in some EU-countries. As a result we see that import and export of processed oil takes place between several EU countries. Even if all administrative procedures are followed, waste transport between countries due to the difference in legislation or standards is not desirable.
Due to the high storage and treatment cost, several EUROSHORE members are facing now severe problems, due to the extreme low oil prices. If all costs (collection, transport, storage, treatment) are taken into account for the production of processed oil, than we come close to a price of 100€/ton.
When the oil price was high >300€/ton (for HFO), there was an interest of certain licensed sectors to buy this processed oil as an alternative fuel for co-incineration. At this moment the HFO price is around 100€/ton! That results in the fact that PRF’s cannot sell their processed oil (at a positive price) to cement industry, incinerators, metallurgy etc. Sometimes, the sale is only possible at a zero price or even a negative price. The processed oil is substituted by good oil or alternative energy products such as brown coal, which is used in the German metallurgy.
Due to the decreasing sales market, PRF’s are confronted with higher storage and/or transportation costs. Some customers, like the metallurgy that absorbed almost the complete processed oil of West European countries, have reduced their volumes (of > 200.000tons of processed oil) with 90%. That means that PRF’s have to search for new potential customers abroad. This time consuming process together with the required permits, results in longer storage period. That means that sometimes extra storage capacity is needed outside the company (which is also an extra cost).
In some other European countries, PRF’s have binding multi annual contracts with ports for the collection of ship generated oily waste from seagoing vessels and are obliged to respect their contracts. But, instead of earning money as in the periods when the oil price was significant higher, these PRF’s are losing money on providing their services. However, according to the EU Directive 2000/59/EC, waste management plans should be reviewed at least every 3 years or when a significant change takes place. For these port authorities it seems, that the difficult situation of PRF’s is not relevant enough to justify a review of the waste management plans.
The combination of all these factors results in a difficult position of the PRF’s and a broader spectrum of solutions is needed:
1. We think about measures that could generate an higher demand for processed oil.
- some industries are limited in taking in processed oil, up till a max. of 40%. If these volumes could be unlimited, this would result in an higher demand;
- in some countries the production of marine fuels is forbidden by law; if, the production of fuels would be allowed, the PRF can obtain a better sales price (depending upon the technology used)
- in some cases, the internal use of processed oil in the treatment process, could also be a potential outlet for the recycled oil. Today, this practice is also forbidden in most countries.
2. Another solution could be an increase in the tariffs.
- in order to compensate the reduced sales price of processed oil (we are lucky if we can get rid of the processed oil at a zero price) we should/could increase the tariffs for the collection of oily mixtures. This practice was applied in an EU country in 2015. As a result we saw a drop in the collected volumes with >30% (from > 100.000tons of oily waste to ca 70.000tons) in the collected volumes! The use of low Sulphur fuels in the ECA’s with reduced volumes of sludge as a consequence, will justify a drop in the volumes of probably ca 5%. That means that the remaining reduction is caused by the price increase applied by the PRF’s.
- if these volumes are not absorbed in other EU-ports, this could mean that illegal discharges could raise or that certain volumes are collected in ports outside EU which are not fully competent in handling this type of hazardous waste.
- in certain countries/ports the tariffs for the use of PRF’s are set for several years. In some ports they cannot be reviewed and as a result, the PRF’s will go bankrupt if nothing is changing.
Special circumstances call for special measures.
We believe that an urgent review of the fees is required. To avoid that part of the waste will be illegally dumped somewhere, we ask the competent authorities for a more strict enforcement regime.
We also insist that port waste management plans should be reviewed more frequently, especially taken into account the very volatile oil market. In such a review, tariffs could follow more easily the development of the oil prices. If tariffs will not be reviewed this would inevitably lead to a degradation of the high standard of PRF’s that our members have worked hard to establish with the possibility that adequate reception facilities may not be available to the same extent as previously.
The shipping industry and relevant authorities expect that the waste sector will provide adequate solutions for new challenges such as wash waters or sludge from scrubbers or for the collection and treatment of ballast water which is not compliant.
However, these new types of waste demand new investments in equipment and treatment in order to provide a professional service. In a climate where the PRF-sector is facing serious difficulties, this could result in the fact that certain services will no longer be provided. For that reason, we need urgent solutions on the short term and a long term perspective for a continuous investment in waste solutions.
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