Anuj Kumar Singh
Senior Project Manager, Energy
Re-refined base oils (RRBOs) have steadily gained traction in the global lubricants industry over the past decade. Initially seen as a sustainable alternative to virgin base oils, RRBOs are now transitioning into a mainstream option for many lubricant blenders and additive companies. This growth is driven by environmental regulations, circular economy principles, and the need for high-quality lubricants in modern engines. However, a significant technological shift is now reshaping the RRBO landscape, with the emergence of Group III RRBOs. While there have been a few re–refineries that produced Group III, the year 2025 has been witnessing the traction building up.
Why Group III Matters
Group III base oils are highly refined, offering superior performance characteristics such as high viscosity index, low volatility, and excellent oxidation stability. These properties make them essential for advanced automotive lubricants, especially in markets such as the United States and Western Europe, where original equipment manufacturer (OEM) specifications demand premium-quality formulations for fuel efficiency and emission control. The basestocks are also finding a wider demand base in the emerging markets.
Traditionally, Group III production was dominated by virgin base oil refiners; but now, re-refiners are entering this space, leveraging technology upgrades and market gaps to produce Group III RRBOs. This move is significant because it positions RRBOs as not only an eco-friendly option but also a high-performance solution.
Global Group III RRBO Landscape
Despite years of momentum and a growing sustainability narrative, the RRBO market remains a niche player in the global lubricants arena. According to Kline’s latest report, Sustainability, Used Oil, and Re-Refined Lubricants 2025, global RRBO production hovers around 3.3 million tonnes, a modest figure when stacked against the industry’s scale.
RRBOs currently make up just 8% of global lubricant demand, and the lion’s share still sits firmly in Group I territory. The leap to Group III, the premium tier, is happening but only in small, incremental steps. For now, RRBO continues to straddle the line between promise and reality, waiting for the big break that could redefine its role in a greener future.
Two factors stand between the re-refining industry and true Group III excellence: technology and feedstock quality. The first hurdle has apparently been addressed. Advanced re-refining technologies have been available for years, and a few of the plants in North America and Western Europe have been producing Group III-grade materials for a few years now.
But here’s the catch: technology alone is not enough. The real differentiator is feedstock quality, which is the secret ingredient that elevates the final product from good to premium. The criticality of this factor can be gauged from an example from the market: A re-refining company using solvent extraction technology managed to hit Group III benchmarks, largely attributed to a rigorous feedstock quality control system. In short, the path to high-performance RRBO is not just paved with technology, but also built on the foundation of clean, consistent feedstock.
While the overall capacity to produce Group III RRBO may be small worldwide, the market is increasingly considering it as an important material in the overall blending practices.
Two notable projects highlight this trend:
Safety-Kleen started producing Group III RRBO at its Wichita re-refinery in Kansas in early 2025. This marks a major milestone for the company and the industry, signaling confidence in the demand for high-quality re-refined products.
Vertex Energy has repurposed its hydrotreater at Mobile, Alabama, to produce Group III RRBO. This strategic shift underscores how existing assets can be adapted to meet evolving market needs.
These developments are not isolated. Industry chatter suggests that more re-refiners are exploring similar upgrades, driven by strong demand and the opportunity to differentiate in a competitive market.
Market Drivers
Several factors are driving the transition toward Group III RRBOs, and each plays a critical role in shaping the future of the re-refining industry. First and foremost is the growing demand for high-performance automotive lubricants. Modern engines are designed for efficiency and durability, which means they require low-viscosity oils with superior thermal stability and oxidation resistance, qualities that are strongly associated with Group III base oils. This trend is particularly evident in regions such as the United States and Western Europe, where OEM specifications and stringent emission norms have raised the bar for lubricant quality.
Another major driver is sustainability pressure across the value chain. OEMs, lubricant blenders, and even end users are increasingly committed to reducing carbon footprints and promoting circular economy practices. RRBOs offer a compelling solution by reusing waste oil and minimizing environmental impact, making them an attractive choice for companies with aggressive ESG targets.
Equally important is the endorsement from additive companies, which has significantly boosted confidence in RRBOs. Leading additive suppliers have validated re-refined oils for use in premium formulations, ensuring that performance standards are met without compromise. This technical approval has removed a major barrier for lubricant blenders, allowing RRBOs to compete head-to-head with virgin Group III oils in high-end applications.
Together, these factors create a strong foundation for the growth of Group III RRBOs, positioning them as a sustainable and technically advanced alternative in a market that demands both performance and smaller carbon footprint.
Challenges Ahead
Despite the optimism surrounding Group III RRBOs, scaling up production comes with significant challenges. One of the biggest hurdles is the high capital expenditure required to upgrade re-refineries with advanced hydrotreating and finishing units that are essential for achieving Group III quality standards. In addition, used oil collection remains costly and logistically complex, particularly in fragmented markets where transportation and aggregation add to operational expenses. Finally, smaller operating scales pose a structural disadvantage for re-refiners compared to large virgin base oil producers, limiting economies of scale and impacting overall competitiveness. These factors make expansion a demanding process, even as market opportunities grow.
Looking Forward
The emergence of Group III RRBO is a promising development for the lubricants industry. It aligns sustainability with performance, offering a win-win for stakeholders. However, the road ahead will require careful navigation of technical, financial, and supply chain challenges. If current trends continue, we could see more Group III RRBO capacities coming online globally, reshaping the competitive dynamics of base oil supply.
Sustainability, Used Oil, and Re-Refined Lubricants
Sustainability, Used Oil, and Re-Refined Lubricants
This article originally appeared in the February issue of Lubes’N’Greases.
