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The walking stick of experience
We are entering the final stretch of 2019, which mainly brought the gradual deterioration, forecast after forecast, of medium and long-term economic projections, both internationally and domestically. In the case of Spain, this includes one last reduction of four-tenths of expected growth for 2019 (from 2.3 to 1.9%) and another four for 2020 (from 1.9 to 1.5%), by the European Commission.
11-12-2019
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Trade wars, Brexit, problems in the automobile industry and, in Spain, political uncertainty have prepared the ground to spread mistrust in the future among consumers and entrepreneurs, despite the fact that the data of the real economy, at least in Spain, isn’t really negative so far. But everyone knows that the Economy is mainly all about projections, and if these are not good, consumption and investment decline, and, with them, economic growth.
Larger funding effort
As for the international prices linked to our activity, especially those of base lubricants (ICIS), first, there was a downward trend and then a flat trend throughout the year, ranging from a price of approximately € 650/t at the start of the year, to under € 550/t at this time. This involves reduced competitiveness in regenerated used oil, and this has forced us to significantly increase (almost 40% compared to the end of 2018) the funding effort in order to continue to guarantee management and treatment through regeneration.
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The possible change of the ‘rules of the game’ for the management of used industrial oil will be a major challenge that we’ll take on unequivocally.
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In 2020, we will continue to monitor all the indicators that could anticipate events, both in the macroeconomic field, and specifically those of the oil product markets, in order to adapt to the different situations that may affect us.
2020 will also be an important year for controlling this waste in Spain and Europe, as Member States will have to inform the European Commission about marketed industrial oils, and managed used oils. Indeed, in this issue of ‘Conectados’, we provide a detailed analysis of the novelties involved in the data communication format approved by the European Commission, with regard to how Spanish regulations are interpreting key aspects such as oils subject to Extended Producer Responsibility, or the calculation of theoretically generated used oils, for which the Commission uses different coefficients depending on the type of oil, instead of a general coefficient.
The challenge ahead
Although it is, for now, merely a definition of how to report data to Europe, the truth is that some of these changes are significant, and we will see if they are transposed into Spanish regulations, which must be modified, in any case, to adapt to the new waste directive of 2018. These changes would, in practice, mean a change of the ‘rules of the game’ for the management of used industrial oil.
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Without a doubt, this is a major challenge that will affect the systems monitoring the ‘placing on the market’ and management of used oils that we have implemented, including the calculation of objectives. A new challenge that we are taking on unequivocally, and for which we have been preparing a long time, thanks to exhaustive and technological monitoring of operations (both regarding the placing on the market and collection and treatment), which provides information with an unprecedented level of detail and, thus, greater capacity for manoeuvre and adaptation.
Pythagoras said: ‘Favour the walking stick of experience over the speeding cart of fortune’. And the truth is, our 13 years’ experience providing a stable and efficient solution for used oil in Spain is our main asset. That which makes us the benchmark agent in this area and the walking stick on which to lean on in the face of the challenges of the future.
Experience and knowledge of the processes and markets involved that we have already shared with various international delegations, as we explain in this issue, and that we will also make available to the Spanish authorities, if required, to help define the best possible framework regulation. After all, we are talking about a very specific sector in which - given the characteristics of the product, its sectoral and territorial distribution, and the deficient waste management process - Extended Producer Responsibility is crucial to prevent the environmental impact of waste as polluting as used oil.