In a move aimed at formalising India’s used oil recycling ecosystem, Re Sustainability Limited has signed a Memorandum of Understanding (MoU) with state-run refiner Indian Oil Corporation Limited to launch the country’s first structured national initiative for the collection and recycling of used lubricating oil. 

The collaboration seeks to build a circular value chain for lubricants, with a focus on improving resource efficiency, strengthening environmental governance, and reducing dependence on virgin crude-derived base oils. By enabling systematic recovery and re-refining of used lubricants, the initiative is expected to help conserve natural resources while lowering foreign exchange outflows linked to base oil imports.

Under the agreement, the companies will establish a dedicated Special Purpose Vehicle (SPV) to develop a nationwide reverse logistics and collection network for used lubricating oil. The platform will aggregate waste oil from industrial and automotive sectors and support the development of advanced re-refining infrastructure to produce Re-Refined Base Oil (RRBO), including Group I and Group II+ grades. 

“As India’s largest integrated energy company, Indian Oil is committed to advancing solutions that strengthen both energy security and environmental responsibility,” says Bankim Patra, Country Head (Lubes) at Indian Oil. He adds that formalising used oil collection and recycling would enable responsible recovery and circular utilisation of lubricants, supporting a more resource-efficient energy ecosystem.

Recovered oil under the initiative will be processed into RRBO that can be reintroduced into lubricant manufacturing value chains. This circular approach is expected to enhance material efficiency across the sector while reducing reliance on primary raw materials.
Highlighting the broader implications, Masood Mallick, Managing Director and Group CEO of Re Sustainability, says that large-scale systems are essential to recover value from complex waste streams. He notes that the partnership represents a transformative step towards institutionalising structured oil recycling in India and enabling a shift from waste management to resource recovery.

The initiative targets an annual collection of 100 kilotonnes of used lubricating oil, supported by a nationwide network for aggregation, logistics, and traceability. As part of the plan, the two companies will also set up a state-of-the-art re-refining facility at mutually agreed locations, combining new infrastructure development with upgrades to existing plants. 
The proposed facility is expected to have a processing capacity of 50–100 kilotonnes per annum and is targeted for commissioning within the next three years. It will be designed to convert used lubricating oil into Group II RRBO compliant with Bureau of Indian Standards (BIS) as well as international specifications, forming the foundation of a scalable circular oil recovery ecosystem.

Beyond oil recovery, the collaboration will also cover the collection and recycling of plastic lubricant containers in line with Extended Producer Responsibility (EPR) regulations. This is expected to strengthen lifecycle management practices for lubricant packaging and improve regulatory compliance across the sector. 

India currently generates around 1.3 million tonnes of used lubricating oil annually, but only about 0.2 million tonnes is recovered through formal recycling channels. The companies inform that the initiative aims to expand formal recovery infrastructure, unlock the material value of waste lubricants, and accelerate the country’s transition towards a circular and low-carbon lubricant economy.