Issue
Is used base oil that undergoes sophisticated processes that remove impurities and return the oil to its former state 're-refined base oil' for the purposes of the table in subregulation 4(1) of the Product Stewardship (Oil) Regulations 2000 (the Regulations)?
Decision
Yes. Used base oil that undergoes sophisticated processes that remove purities and return the oil to its former state is 're-refined base oil' for the purposes of the table in subregulation 4(1) of the Regulations.
Facts
An entity treats used transformer oil by removing contaminants from the used oil. The treatment involves several separate processes which result in the oil meeting the specifications of new oil.
After processing, the oil is returned to industry in an 'as new' condition for use in its original application.
Reasons for Decision
Under subsection 9(1) of the Product Stewardship (Oil) Act 2000 (the PSO Act), an entity is entitled to a product stewardship (oil) benefit for the sale or consumption of recycled oil that they have recycled in Australia.
The amount of benefit payable for certain types of products is specified in the table at subregulation 4(1) of the Regulations. The term 're-refined' is mentioned in the table at subregulation 4(1) of the Regulations at the following items: 1 Re-refined base oil (for use as a lubricant or a hydraulic or transformer oil) that meets the criteria mentioned in Schedule 1 2 Other re-refined base oils 7 Industrial process oils and lubricants, including hydraulic and transformer oils (re-processed or filtered, but not re-refined)
The term 're-refined' is not defined in the legislation. The ordinary meaning of 'refine' as a verb is given by The Macquarie Dictionary, 2001 , rev. 3rd edn, The Macquarie Library Pty Ltd, NSW as ' 1 . to bring to a fine or a pure state, free from impurities : to refine metal, sugar, petroleum, etc' . Therefore, using this definition, the re-refining of oil is to restore the oil to its former state by the removal of impurities.
However, it may be argued that the re-processing of oils may produce the same result as the re-refining of oils. Therefore it is necessary to differentiate between the 'reprocessing' of oils and the 're-refining' of oils. Where oils are recycled using simple physical processes such as the operation of an oil filter in an engine, this would be considered to be re-processing. In contrast, the removal of contaminants from transformer oil, by a sophisticated process involving a chemical reaction, is considered to be 're-refining'. Whether, in a given case, a particular recycling activity constitutes 're-refining' will depend on the facts of the case.
Conclusion
Used base oil that has been subjected to sophisticated processes that remove impurities and restore the oil to its former state has been re-refined for the purposes of the table in subregulation 4(1) of the Regulations.