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System analysis of waste oil management in Finland V Kapustina, J Havukainen, T Virkki-Hatakka and M Horttanainen Waste Manag Res 2014 32: 297 originally published online 5 March 2014 DOI: 10.1177/0734242X14523663 The online version of this article can be found at: http://wmr.sagepub.com/content/32/4/297
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Original Article Waste Management & Research 2014, Vol. 32(4) 297–303 © The Author(s) 2014 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0734242X14523663 wmr.sagepub.com
System analysis of waste oil management in Finland V Kapustina1, J Havukainen1, T Virkki-Hatakka2 and M Horttanainen1
Abstract Waste oil management systems include processes such as generation, collection, recycling, and disposal and result in various environmental, economic, social, and regulatory impacts which complicate waste management analysis. In this paper, the waste oil management system in Finland is analysed using the systems thinking approach to identify the main system components and to describe the interactions between them. The results of analysing the Finnish system increase the understanding of the main factors affecting the performance of waste oil management. The outcome of this analysis can be adapted for the examination of similar systems. The waste oil management system analysis shows an increase in the performance: the waste oil collection rate within the official collection system has increased more than 30% during the last 6 years. The environmental performance of the treatment and recovery system have increased, taking into account the increase of the material recovery rate, more than 70% during the last 6 years. Keywords Environmental performance, Finland, systems thinking approach, waste management, waste oil
Introduction Waste oil management has global impacts on crude oil consumption, and local and regional impacts because of environmental, economic, and social issues. According to the strategic approach of the European Commission for sustainable utilization of natural resources (Commission Communication, 2005), one way to reduce the environmental impact of resource exploitation is to intensify the resource efficiency and productivity. As a part of this strategy, better development and implementation of the waste management system with intensified material and/or energy recovery are needed. In Finland, waste management must be organized under the Waste Act (646/2011) and Waste Decree (179/2012). The prioritization is given to the recycling (oil re-refining or other reuses of oil) of waste oil over the energy recovery where it is technically possible. The National Waste Plan for 2016 of Finland has measures to look for possibilities of adding some categories of waste, including waste oil, to the list of products and substances covered by the producer responsibility to make recycling more efficient (Ministry of the Environment, 2009). Finland has good experience in waste oil collection and treatment as fuel for heat and power production. Until 2007, most of the waste oil has been used as a support fuel in the hazardous waste incineration plant in Riihimäki, some cement kilns, and power plants. Since 2009, there has been a new re-refinery plant in operation in Hamina, Finland. A large number of methods and approaches that can be used for analysing waste management system have been developed (Finnveden et al., 2007). Most of the studies on the waste oil
management system analyse the various independent processes of the system separately (e.g. transportation system, treatment options, economic evaluation) using a life cycle assessment (LCA) approach (Boughton and Horvath, 2004; Kalnes et al., 2006; Kanokkantapong et al., 2009), carbon foot print analysis (Pires and Martinho, 2012), or techno-economic evaluation (Ali et al., 1995). Pires and Martinho (2013) analysed the whole technological process of the waste oil management system by LCA. However, LCA gives only a static indication of the environmental impacts of the processes or activities (Wrisberg et al., 2002). The waste management system is complex and dynamic, and its elements are largely interdependent (Yuan et al., 2012). In line with this trend, Marshall and Farahbakhsh (2013) analysed the solid waste management system using a systems thinking approach. However, waste oil management system analysis with help of comprehensive systems thinking methods has not been performed previously. The aim of conducting this analysis is to identify the main elements (actors) in the system and to show the interconnections 1Laboratory
of Environmental Technology, Lappeenranta University of Technology, Lappeenranta, Finland 2Centre for Training and Development, Lappeenranta University of Technology, Lappeenranta, Finland Corresponding author: Viktoriia Kapustina, Laboratory of Environmental Technology, Lappeenranta University of Technology, Skinnarilankatu 34, PO Box 20, 53851, Lappeenranta, Finland. Email: [email protected]
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1. Identification of the system goals
2 System boundary, inventory and identification of the outputs of the system 3 Analysis of system during specific period of time 4 Description and comparison of the analysis with respect to the outputs of the system Figure 1. Steps in systems thinking analysis.
between them and the connections to other systems. This paper presents also the historical background that frames current waste oil management practices in Finland and identifies the leverage points of the system. This will result in the identification of a variety of influences that they may have on each other.
Materials and methods Systems analysis The idea behind the systems thinking approach is to examine systems from a holistic perspective. The components of the system will lose their meaning and function if they are analysed independently. Thus, one of the methodological approaches that can be used for waste management system analysis is based on the splitting of everything into parts and looking for internal interdependencies of the system between those parts (Seadon, 2010). In order to analyse waste management system, the study is divided into four steps (Figure 1). First, based on the common definition of a system – a ‘set of interacting units or elements that form an integrated whole intended to perform some function’ (Clark, 1978) – the function (goal) of the system from the different perspectives is identified. This helps, in the second stage of the analysis, to find the actors and to set boundary and identified outputs of the system. The system outputs are the values that qualify and quantify the goals of the system. For example, these can be the amount of energy produced or consumed, waste collected, recycled, or disposed. Developing understanding of the drivers of waste management systems in the past can provide the needed context and insight into future possibilities (Marshall and Farahbakhsh, 2013). As systems thinking is intrinsically focused on relationships (Checkland, 2000), the historical information and the data for a specific period of time and the interconnection flows within the system are needed. This is done in third step of the analysis. The interconnection flows between the actors are accomplished through the regulations, financial flows (e.g. subsidy, waste oil charges, prices for waste oil utilization and disposal), mass flows (e.g. lubricant oil consumption, waste oil production of different quality), coherences of the goals of the stakeholders, etc. The data for the studied system
collected from the communications with the companies and the public reports of the Ministry of the Environment. Next, interconnection flows between the system actors are analysed. This is followed by studying the outputs of the system based on its goals and identifying the main bottlenecks and leverage points of the system changes. The classification of the leverage points is based on the 12 leverage points of Meadows (2009).
Case-study: waste oil management in Finland In this study, the general performance of the waste oil management system in Finland is evaluated from the environmental point of view. The information used during the analysis are the amount of waste oil produced, collected, and treated; the financial support from the government and the financial flows between the actors of the system; and the changes in legislation and the treatment technologies during 2006–2011. The social aspects of the system are taken into account. Both primary and secondary data is used in this study. Primary data was collected directly from the organization in control of the unit processes. Secondary data was received from sources such as existing databases and literature.
Results and discussion System goals The goals of the system can be considered from different perspectives. Waste oil producers (i.e. firms, industry, and individuals) aim to decrease the cost associated with waste oil management without any additional routine. On the other hand, lubricant oil consumers strive to obtain good-quality products without any additional cost. Collectors and processors want to optimize the system processes to have the minimum risk and maximum profit. In addition, the Ministry of the Environment would like to optimize the system so that it would have high environmental performance and work in accordance with the regulations. The identified goals of the system are to: (i) minimize the environmental impacts of waste oil management activities; (ii) intensify the recovering of essential material resources; and (iii) reduce the cost associated with waste oil management.
Actors and boundary of the system Based on the goals of the system and the communication with companies, Figure 2 represents the main actors of the waste oil management system and the direction of financial and material flows in 2006 and 2011 in Finland. This forms the boundary of the system. The system cannot be considered as complete without any of the actors presented in Figure 2, and the goals of the system cannot be exhibited by the actors in isolation. One limitation of this study is the lack of information on the waste oil which is collected outside the official collection system, its amount and treatment methods applied to it. Also the lubricant
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Figure 2. Waste oil collection system in Finland in 2006 (a) and 2011 (b).
Solid arrows: financial flows, € year-1: 1: income from the new lubricant oil sold, 2: waste oil charge, 3: subsidies for waste oil collection, 4: waste management tax (green tax), 5: payment to the municipal collection points, 6: payment to the collection company, 7: distribution of the waste oil collection subsidies, 8: payment for the waste oil delivering, 9: tax for oil incineration, 10: waste oil disposal cost, 11: cost of reprocessed waste oil (fuel oil). Dashed arrows: material flows, t year-1 : 1: new lubricant oils sold, 2: waste oil to the municipal collection or companies’ internal collection points, 3: waste oil collected through the official collection system, 4: waste oil left outside the official collection system or disposed illegally, 5: waste oil sent to the treatment to the disposal plants, 6: imported waste oil, 7: reprocessed waste oil (fuel oil) sent to the incineration plants, 8: waste oils left after the reprocessing process (not suitable for fuel oil production).
oil production from crude oil and the use phase are not considered in this analysis.
Identification of the system outputs (indicators) Fitzsimons (2005) concluded that the most significant environmental impacts associated with the waste oil management almost
certainly arise before the collection during the illegal disposal. Thus, one of the main indicators for this study will be the collection rate of waste oil. With respect to the hierarchic approach of the waste management where re-refining is a more preferable option, the increase of the waste oil regeneration rate (material recovery rate) can also be considered as an increase of the environmental performance of the system. For studying the economic performance of the system, the information on the financial flows
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inside the waste oil management is presented. However, it is not complete since most of the information is confidential, and it is not possible to reproduce the whole economic situation of the waste oil management. Thus, the government subsidization of the waste oil transportation will be used as the representation of the feasibility of the waste oil management system. The reason for this is that the transportation of waste oil is subsidized by the Ministry of the Environment only when it is not profitable.
Data inventory for a specific period of time and for interconnection flows within the system A part of the new lubricant oils, left after the use phase, is collected by the generators or sent to the collection points (Figure 2, flow 2). The Ministry of the Environment (Figure 2, Governmental institution) controls the waste oil collection and treatment by signing a long-duration (5 years) agreement with a waste collection company (Figure 2, main transportation company). The company is chosen by the bidding competition. As a direct result of the agreement, the company has a nationwide responsibility to supervise the collection and handling of waste oil (Figure 2, flow 3) and to deliver it (Figure 2, flow 5) to appropriate processors (Figure 2, regeneration plant, hazardous waste incineration plant, reprocessing plant, and re-refinery plant). However, a part of the collectable waste oil is handled and treated outside the official collection system (Figure 2, flow 4). The waste oil collected outside the official collection system can undergo the following: reuse by the generator with simple pretreatment, illegal combustion in small heaters or dumping in soil or water. In some municipalities, the main transportation company collects the waste oil directly. However, in most parts of the country, subcontracts (Figure 2) cover a number of other smaller firms which are then also subjects to new 5-year contracts with the main transportation company (Fitzsimons et al. 2009). The waste oil transportation system is supported by a subsidy (Figure 2, flow 3) from a fund managed by the Ministry of the Environment. This fund has accumulated from the waste oil charge (Figure 2, flow 2) on the cost of the new lubricant sold (Figure 2, flow 1). The exported oils are exempted from the waste oil charge, as well as such lubricant oils which are wholly consumed during use (Ministry of the Environment, 2013). All kinds of lubricant oils and greases to which waste oil charge should be applied are classified in the Waste Oil Charge Act 894/1986. Since 2006, the waste oil charge has been set at 57.5 €/tonne of new lubricant oil sold (Waste Oil Charge Act 894/1986). The collection site operators and large industrial waste producers pay a disposal fee if the waste oil is of low quality due to the contamination with more than 10% water and other foreign particles, regardless of the volume collected (Figure 2, flow 6). Otherwise, if the waste oil has a good quality, it can be collected free of charge depending on the size of the waste oil collected per one time. In the past, the producers were excluded from the
payment if the batch sizes of waste oil were over 1000 l. After that until recently, the limit was 400 l, and since 2013, it has been 200 l. The waste oil from households is collected free of charge to waste collection stations and circulating trucks, for example. However, the municipalities pay the disposal fee to the collection company (Figure 2, flow 5) for this service since the oil quality is typically poor (Fitzsimons et al., 2009). The municipalities collect a green tax paid by each household (Figure 2, flow 4) that includes the waste oil disposal fee but also other costs of the dangerous waste collection and recycling point maintenance and operation. The waste oil processors pay to the main transportation company for the delivering of waste oil (Figure 2, flow 8). The prices for waste oil delivery are the same for all processors (Luoto, 2012). The main transportation company receives the subsidy and distributes it to the subcontractors (Figure 2, flow 7) (Fitzsimons et al., 2009). The subsidy paid to the main transportation company, from the accumulated fund, is a fixed annual subsidy (Figure 2, flow 3) depending on the yearly cost of oil collection. This is a cost-reimbursement contract based on an open-book arrangement in which the collector provides the accounting information as required. The Finnish Council of State gives a subsidy at a level that the collecting companies can make a profit (Peuranen, 2012). The main transportation company received 2.052 million € of waste oil subsidy in 2007. This is slightly lower than the subsidy in 2006 (2.6 million €) because of the increasing efficiencies and possibly because of the crude oil price rises in 2007 led to greater profits for the main transportation company (Fitzsimons et al., 2009). For the years 2008–2010, no subsidy was paid at all since income from selling waste oil exceeded expenses. In 2011, the subsidy payment was around 0.3 million € (Peuranen, 2012). Environmental authorities control also the waste oil flows by an environmental permit which states what kind of waste can be treated on the plant and to what extent. According to the recent environmental permit, the hazardous waste incineration plant (Figure 2) is only allowed to incinerate waste oil that is not suitable for the regeneration process. However, other incineration plants such as cement and lime kilns or power plants (Figure 2) can get permits for waste oil use as a support fuel. The legislation in the Air Pollution Control Act (67/1982) and the Government Resolution on Restricting Incineration of Waste Oil (447/1987) came into force in the mid-1980s and influence the decision making related to the construction of new plants for waste oil treatment with stricter emissions standards. Before the autumn 2007, waste oil was mainly incinerated, either in large industrial plants such as cement/lime kilns, power plants, and hazardous waste incineration plants (Figure 2a). The hazardous waste incineration plant accepts different types of waste such as hazardous organic chemical waste, contaminated soil, inorganic hazardous waste, used refrigeration coolant, waste water, and sludge (Perttilä, 2012). At that moment, there was only one regeneration plant (Figure 2) with the average capacity
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Figure 3. Waste oil collection and distribution to processors in Finland, years 2006–2011 (Luoto, 2012; Kääntee, 2013; Öljyalan Keskusliitto, 2011).
of 2000 tonnes/year-1 waste oil (Fitzsimons et al., 2009). Oils that can be regenerated include hydraulic, transmission, circulation, lubrication, turbine, and transformer oils that do not contain PCB. They are recovered as base oils which are mainly used in the forestry sector for cutting tools (Ekokem, 2005). Since 2007, a part of the waste oil has been stockpiled by the re-refinery plant (Figure 2b), that is a joint venture company established by two companies. In the joint venture, one company was responsible for the procurement of raw material and the other for the selling of the products to the oil market. The procurement of raw material has succeeded well. Supply agreements have practically eliminated lack of waste oil as a resource for re-refinery process. In 2009, an oil re-refinery plant with the capacity of 60,000 tonnes/year-1 waste oil (Figure 2b) was put into operation (Fitzsimons et al., 2009). It is specialized in the regeneration of used mineral lubricant oil, such as automotive, industrial, and hydraulic oils (L&T Recoil, 2007). The waste oil which is accepted to the re-refinery plant has specific requirements; however, in 2011, 18,000 out of 22,000 tonnes of waste oil collected through the official collection system was treated in this plant. The re-refinery plant has also received waste oil (Figure 2b) from UK, Estonia, and Sweden (Elo, 2010). The batches of waste oil delivered to the plant are sampled and tested to meet the technological requirements. If the waste oil does not meet the required criteria, it is sent to the hazardous waste incineration plant (L&T Recoil, 2007).
tonnes in 2011 (Luoto, 2012), the collection rate of the official collection system is 74%. In 2006 the collection rate was 42%. It should be mentioned that although the amount of waste oil outside the official collection system (≈13,500 tonnes in 2007) can be approximated from the report of Fitzsimons et al. (2009), it was not taken into account in the calculation of the collection rate in Finland. Thus, if the collection rate outside the official collection system were taken into account, the real collection rate in 2011 would have been even higher than 74%. With the implementation of the re-refinery plant, the material recovery rate of the waste oil management system increased from 9 to 87% (calculated within the official collection system by dividing the yearly amount of waste oil sent to the regeneration plant and the re-refinery plant with the yearly amount of waste oil collected). The Ministry of the Environment emphasizes that waste oil collection as an important part of the waste oil management by financing it. In 2008–2010, subsidies were not paid on waste oil collection at all since the main waste oil transportation company was profitable. Reasons for this might be partly the rising prices of crude oil and the increasing efficiencies of the waste oil collection (Fitzsimons et al., 2009). The transportation company may increase the price for the delivered waste oil since crude oil products will have higher values on the market with some delay after the price rises for crude oil.
Analysing of the interconnection flows and outputs of the system
Illegal burning is a common problem in waste oil management. This problem appears due to the irresponsible behaviour of waste oil producers who give their waste oil to the collectors without environmental permits. Illegal waste oil treatment can include burning in small heaters or dumping in soil or water (Fitzsimons et al., 2009). One reason for that is the economically positive value of the waste material. The collectors outside the official system pay for waste oil; therefore, the producer of waste oil preferably gives its waste oil to the collector who pays more (Luoto, 2012). Also municipal authorities do not have enough resources for monitoring this issue.
The result of waste oil management system in the form of the balance of waste oil collection and distribution to processors in 2006–2011 is presented in Figure 3. The total amount of lubricant oil sold in 2011 was 54,000 tonnes (Öljyalan Keskusliitto, 2011). By taking into account the share of collectible waste oil, which is up to 56% of the volumes of new lubricant oil sold (US Department of Energy, 2006), and the amount of waste oil collected through the official collection system, which was 23,000
Identifying main bottlenecks and leverage points of the system changes
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Table 1. Identified leverage points of the waste oil management system in Finland. Leverage point
Identified
Effect on the system
Parameters
Data on waste oil quality Identification of the waste oil type
Rising prices of crude oil
Material stocks and flows
Decreasing the minimum amount of waste oil that can be collected free of charge
Balancing feedback loops
Introduction of the waste oil charge
Information flows
Collaboration of two companies with knowledge on the sources of waste oil and the market situation of the final products of the re-refinery process (base oil) Control of the waste oil collection and treatment by long-duration agreement o waste oil is delivered to the appropriate processor Obligation of treatment plants to have environmental permits Legislation in the Air Pollution Control Act (67/1982) and the Government Resolution on Restricting Incineration of Waste Oil (447/1987) The view on the waste oil system as to increase the efficiency of the waste oil collection. Introduction of the waste hierarchy approach in the waste oil management
Decision as to whether regeneration is appropriate Waste oil to the appropriate processor according to the environmental permits Increase in profitability of transportation companies, due to the price of waste oil delivered to the final processor correlates with the present price of crude oil Decrease in the cost associated with waste handling for such enterprises which generate only small amount of waste oil No need to keep big containers on the storage since waste oil can be collected more often Ensures the possibilities for the financial support for proper waste oil collection and transportation where there is a need Construction of a new re-refinery plant that increases the environmental performance of the system Collection and transportation is financially supported when there is a need
System rules System goals Paradigm out of which the system arises
The percentage of the lubricant oil changed by private vehicle owners themselves has decreased, but it is still considerably high (in 1991, at least 40% of all automobile owners and 95% of farmers) (Lohof, 1991). The amount of waste oil collected in municipal waste collection points is approximately 2000 tonnes/year, and it is usually of poor quality. People are not motivated to collect waste oil separately, and they mix it with other chemicals; thus, the waste oil is not anymore suitable for regenereration processes. Within the analysed system, different leverage points were identified (Table 1).
Conclusions Finland has good experience in waste oil collection and treatment as fuel for heat and power production. The Ministry of the Environment controls the waste oil management system by implementing the contract with the main transportation company and supporting the waste oil collection financially. It also controls the waste oil treatment options through the environmental permits. The waste oil management system analysis shows the increase of performance: the waste oil collection rate increased from 42% in 2006 to 74% in 2011. The environmental performance of the
Decisions as to which kinds of waste can be treated on the plant and to what extent Influences the decision making related to the construction of new plants for waste oil treatment with stricter emission standards Subsidies of waste oil collection and transportation by the Ministry of the Environment Shifting from waste oil energy recovery to material recovery
system also improved, which was evaluated by taking into account the increase of the material recovery rate (9% in 2006 to 87% in 2011). In accordance with the Directive 2008/98/EC, it is a more preferable treatment option. However, to draw more concrete conclusions, a more comprehensive assessment of environmental impacts is required and it will be studied in further research using life cycle assessment methodology. Some of the main bottlenecks of the system, as in the waste management in general, are the lack of controlling environmental authorities and the low motivation of the private vehicle owners to separate waste oil. This can be improved by introducing a payment for the waste oil that is of good quality and suitable for regeneration. The social aspects such as feedbacks on the changes implemented in the system were not considered fully in this study and it can be recommended for the future research topics.
Declaration of conflicting interests The authors declare that there is no conflict of interest.
Funding This research was done within the Clean Oil Project 2012–2014, which is supported by the South-East Finland–Russia ENPI CBC 2007–2013 programme; grant number 2011-028-SE558.
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System analysis of waste oil management in Finland V Kapustina, J Havukainen, T Virkki-Hatakka and M Horttanainen Waste Manag Res 2014 32: 297 originally published online 5 March 2014 DOI: 10.1177/0734242X14523663 The online version of this article can be found at: http://wmr.sagepub.com/content/32/4/297
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Original Article Waste Management & Research 2014, Vol. 32(4) 297–303 © The Author(s) 2014 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0734242X14523663 wmr.sagepub.com
System analysis of waste oil management in Finland V Kapustina1, J Havukainen1, T Virkki-Hatakka2 and M Horttanainen1
Abstract Waste oil management systems include processes such as generation, collection, recycling, and disposal and result in various environmental, economic, social, and regulatory impacts which complicate waste management analysis. In this paper, the waste oil management system in Finland is analysed using the systems thinking approach to identify the main system components and to describe the interactions between them. The results of analysing the Finnish system increase the understanding of the main factors affecting the performance of waste oil management. The outcome of this analysis can be adapted for the examination of similar systems. The waste oil management system analysis shows an increase in the performance: the waste oil collection rate within the official collection system has increased more than 30% during the last 6 years. The environmental performance of the treatment and recovery system have increased, taking into account the increase of the material recovery rate, more than 70% during the last 6 years. Keywords Environmental performance, Finland, systems thinking approach, waste management, waste oil
Introduction Waste oil management has global impacts on crude oil consumption, and local and regional impacts because of environmental, economic, and social issues. According to the strategic approach of the European Commission for sustainable utilization of natural resources (Commission Communication, 2005), one way to reduce the environmental impact of resource exploitation is to intensify the resource efficiency and productivity. As a part of this strategy, better development and implementation of the waste management system with intensified material and/or energy recovery are needed. In Finland, waste management must be organized under the Waste Act (646/2011) and Waste Decree (179/2012). The prioritization is given to the recycling (oil re-refining or other reuses of oil) of waste oil over the energy recovery where it is technically possible. The National Waste Plan for 2016 of Finland has measures to look for possibilities of adding some categories of waste, including waste oil, to the list of products and substances covered by the producer responsibility to make recycling more efficient (Ministry of the Environment, 2009). Finland has good experience in waste oil collection and treatment as fuel for heat and power production. Until 2007, most of the waste oil has been used as a support fuel in the hazardous waste incineration plant in Riihimäki, some cement kilns, and power plants. Since 2009, there has been a new re-refinery plant in operation in Hamina, Finland. A large number of methods and approaches that can be used for analysing waste management system have been developed (Finnveden et al., 2007). Most of the studies on the waste oil
management system analyse the various independent processes of the system separately (e.g. transportation system, treatment options, economic evaluation) using a life cycle assessment (LCA) approach (Boughton and Horvath, 2004; Kalnes et al., 2006; Kanokkantapong et al., 2009), carbon foot print analysis (Pires and Martinho, 2012), or techno-economic evaluation (Ali et al., 1995). Pires and Martinho (2013) analysed the whole technological process of the waste oil management system by LCA. However, LCA gives only a static indication of the environmental impacts of the processes or activities (Wrisberg et al., 2002). The waste management system is complex and dynamic, and its elements are largely interdependent (Yuan et al., 2012). In line with this trend, Marshall and Farahbakhsh (2013) analysed the solid waste management system using a systems thinking approach. However, waste oil management system analysis with help of comprehensive systems thinking methods has not been performed previously. The aim of conducting this analysis is to identify the main elements (actors) in the system and to show the interconnections 1Laboratory
of Environmental Technology, Lappeenranta University of Technology, Lappeenranta, Finland 2Centre for Training and Development, Lappeenranta University of Technology, Lappeenranta, Finland Corresponding author: Viktoriia Kapustina, Laboratory of Environmental Technology, Lappeenranta University of Technology, Skinnarilankatu 34, PO Box 20, 53851, Lappeenranta, Finland. Email: [email protected]
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1. Identification of the system goals
2 System boundary, inventory and identification of the outputs of the system 3 Analysis of system during specific period of time 4 Description and comparison of the analysis with respect to the outputs of the system Figure 1. Steps in systems thinking analysis.
between them and the connections to other systems. This paper presents also the historical background that frames current waste oil management practices in Finland and identifies the leverage points of the system. This will result in the identification of a variety of influences that they may have on each other.
Materials and methods Systems analysis The idea behind the systems thinking approach is to examine systems from a holistic perspective. The components of the system will lose their meaning and function if they are analysed independently. Thus, one of the methodological approaches that can be used for waste management system analysis is based on the splitting of everything into parts and looking for internal interdependencies of the system between those parts (Seadon, 2010). In order to analyse waste management system, the study is divided into four steps (Figure 1). First, based on the common definition of a system – a ‘set of interacting units or elements that form an integrated whole intended to perform some function’ (Clark, 1978) – the function (goal) of the system from the different perspectives is identified. This helps, in the second stage of the analysis, to find the actors and to set boundary and identified outputs of the system. The system outputs are the values that qualify and quantify the goals of the system. For example, these can be the amount of energy produced or consumed, waste collected, recycled, or disposed. Developing understanding of the drivers of waste management systems in the past can provide the needed context and insight into future possibilities (Marshall and Farahbakhsh, 2013). As systems thinking is intrinsically focused on relationships (Checkland, 2000), the historical information and the data for a specific period of time and the interconnection flows within the system are needed. This is done in third step of the analysis. The interconnection flows between the actors are accomplished through the regulations, financial flows (e.g. subsidy, waste oil charges, prices for waste oil utilization and disposal), mass flows (e.g. lubricant oil consumption, waste oil production of different quality), coherences of the goals of the stakeholders, etc. The data for the studied system
collected from the communications with the companies and the public reports of the Ministry of the Environment. Next, interconnection flows between the system actors are analysed. This is followed by studying the outputs of the system based on its goals and identifying the main bottlenecks and leverage points of the system changes. The classification of the leverage points is based on the 12 leverage points of Meadows (2009).
Case-study: waste oil management in Finland In this study, the general performance of the waste oil management system in Finland is evaluated from the environmental point of view. The information used during the analysis are the amount of waste oil produced, collected, and treated; the financial support from the government and the financial flows between the actors of the system; and the changes in legislation and the treatment technologies during 2006–2011. The social aspects of the system are taken into account. Both primary and secondary data is used in this study. Primary data was collected directly from the organization in control of the unit processes. Secondary data was received from sources such as existing databases and literature.
Results and discussion System goals The goals of the system can be considered from different perspectives. Waste oil producers (i.e. firms, industry, and individuals) aim to decrease the cost associated with waste oil management without any additional routine. On the other hand, lubricant oil consumers strive to obtain good-quality products without any additional cost. Collectors and processors want to optimize the system processes to have the minimum risk and maximum profit. In addition, the Ministry of the Environment would like to optimize the system so that it would have high environmental performance and work in accordance with the regulations. The identified goals of the system are to: (i) minimize the environmental impacts of waste oil management activities; (ii) intensify the recovering of essential material resources; and (iii) reduce the cost associated with waste oil management.
Actors and boundary of the system Based on the goals of the system and the communication with companies, Figure 2 represents the main actors of the waste oil management system and the direction of financial and material flows in 2006 and 2011 in Finland. This forms the boundary of the system. The system cannot be considered as complete without any of the actors presented in Figure 2, and the goals of the system cannot be exhibited by the actors in isolation. One limitation of this study is the lack of information on the waste oil which is collected outside the official collection system, its amount and treatment methods applied to it. Also the lubricant
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Figure 2. Waste oil collection system in Finland in 2006 (a) and 2011 (b).
Solid arrows: financial flows, € year-1: 1: income from the new lubricant oil sold, 2: waste oil charge, 3: subsidies for waste oil collection, 4: waste management tax (green tax), 5: payment to the municipal collection points, 6: payment to the collection company, 7: distribution of the waste oil collection subsidies, 8: payment for the waste oil delivering, 9: tax for oil incineration, 10: waste oil disposal cost, 11: cost of reprocessed waste oil (fuel oil). Dashed arrows: material flows, t year-1 : 1: new lubricant oils sold, 2: waste oil to the municipal collection or companies’ internal collection points, 3: waste oil collected through the official collection system, 4: waste oil left outside the official collection system or disposed illegally, 5: waste oil sent to the treatment to the disposal plants, 6: imported waste oil, 7: reprocessed waste oil (fuel oil) sent to the incineration plants, 8: waste oils left after the reprocessing process (not suitable for fuel oil production).
oil production from crude oil and the use phase are not considered in this analysis.
Identification of the system outputs (indicators) Fitzsimons (2005) concluded that the most significant environmental impacts associated with the waste oil management almost
certainly arise before the collection during the illegal disposal. Thus, one of the main indicators for this study will be the collection rate of waste oil. With respect to the hierarchic approach of the waste management where re-refining is a more preferable option, the increase of the waste oil regeneration rate (material recovery rate) can also be considered as an increase of the environmental performance of the system. For studying the economic performance of the system, the information on the financial flows
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inside the waste oil management is presented. However, it is not complete since most of the information is confidential, and it is not possible to reproduce the whole economic situation of the waste oil management. Thus, the government subsidization of the waste oil transportation will be used as the representation of the feasibility of the waste oil management system. The reason for this is that the transportation of waste oil is subsidized by the Ministry of the Environment only when it is not profitable.
Data inventory for a specific period of time and for interconnection flows within the system A part of the new lubricant oils, left after the use phase, is collected by the generators or sent to the collection points (Figure 2, flow 2). The Ministry of the Environment (Figure 2, Governmental institution) controls the waste oil collection and treatment by signing a long-duration (5 years) agreement with a waste collection company (Figure 2, main transportation company). The company is chosen by the bidding competition. As a direct result of the agreement, the company has a nationwide responsibility to supervise the collection and handling of waste oil (Figure 2, flow 3) and to deliver it (Figure 2, flow 5) to appropriate processors (Figure 2, regeneration plant, hazardous waste incineration plant, reprocessing plant, and re-refinery plant). However, a part of the collectable waste oil is handled and treated outside the official collection system (Figure 2, flow 4). The waste oil collected outside the official collection system can undergo the following: reuse by the generator with simple pretreatment, illegal combustion in small heaters or dumping in soil or water. In some municipalities, the main transportation company collects the waste oil directly. However, in most parts of the country, subcontracts (Figure 2) cover a number of other smaller firms which are then also subjects to new 5-year contracts with the main transportation company (Fitzsimons et al. 2009). The waste oil transportation system is supported by a subsidy (Figure 2, flow 3) from a fund managed by the Ministry of the Environment. This fund has accumulated from the waste oil charge (Figure 2, flow 2) on the cost of the new lubricant sold (Figure 2, flow 1). The exported oils are exempted from the waste oil charge, as well as such lubricant oils which are wholly consumed during use (Ministry of the Environment, 2013). All kinds of lubricant oils and greases to which waste oil charge should be applied are classified in the Waste Oil Charge Act 894/1986. Since 2006, the waste oil charge has been set at 57.5 €/tonne of new lubricant oil sold (Waste Oil Charge Act 894/1986). The collection site operators and large industrial waste producers pay a disposal fee if the waste oil is of low quality due to the contamination with more than 10% water and other foreign particles, regardless of the volume collected (Figure 2, flow 6). Otherwise, if the waste oil has a good quality, it can be collected free of charge depending on the size of the waste oil collected per one time. In the past, the producers were excluded from the
payment if the batch sizes of waste oil were over 1000 l. After that until recently, the limit was 400 l, and since 2013, it has been 200 l. The waste oil from households is collected free of charge to waste collection stations and circulating trucks, for example. However, the municipalities pay the disposal fee to the collection company (Figure 2, flow 5) for this service since the oil quality is typically poor (Fitzsimons et al., 2009). The municipalities collect a green tax paid by each household (Figure 2, flow 4) that includes the waste oil disposal fee but also other costs of the dangerous waste collection and recycling point maintenance and operation. The waste oil processors pay to the main transportation company for the delivering of waste oil (Figure 2, flow 8). The prices for waste oil delivery are the same for all processors (Luoto, 2012). The main transportation company receives the subsidy and distributes it to the subcontractors (Figure 2, flow 7) (Fitzsimons et al., 2009). The subsidy paid to the main transportation company, from the accumulated fund, is a fixed annual subsidy (Figure 2, flow 3) depending on the yearly cost of oil collection. This is a cost-reimbursement contract based on an open-book arrangement in which the collector provides the accounting information as required. The Finnish Council of State gives a subsidy at a level that the collecting companies can make a profit (Peuranen, 2012). The main transportation company received 2.052 million € of waste oil subsidy in 2007. This is slightly lower than the subsidy in 2006 (2.6 million €) because of the increasing efficiencies and possibly because of the crude oil price rises in 2007 led to greater profits for the main transportation company (Fitzsimons et al., 2009). For the years 2008–2010, no subsidy was paid at all since income from selling waste oil exceeded expenses. In 2011, the subsidy payment was around 0.3 million € (Peuranen, 2012). Environmental authorities control also the waste oil flows by an environmental permit which states what kind of waste can be treated on the plant and to what extent. According to the recent environmental permit, the hazardous waste incineration plant (Figure 2) is only allowed to incinerate waste oil that is not suitable for the regeneration process. However, other incineration plants such as cement and lime kilns or power plants (Figure 2) can get permits for waste oil use as a support fuel. The legislation in the Air Pollution Control Act (67/1982) and the Government Resolution on Restricting Incineration of Waste Oil (447/1987) came into force in the mid-1980s and influence the decision making related to the construction of new plants for waste oil treatment with stricter emissions standards. Before the autumn 2007, waste oil was mainly incinerated, either in large industrial plants such as cement/lime kilns, power plants, and hazardous waste incineration plants (Figure 2a). The hazardous waste incineration plant accepts different types of waste such as hazardous organic chemical waste, contaminated soil, inorganic hazardous waste, used refrigeration coolant, waste water, and sludge (Perttilä, 2012). At that moment, there was only one regeneration plant (Figure 2) with the average capacity
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Figure 3. Waste oil collection and distribution to processors in Finland, years 2006–2011 (Luoto, 2012; Kääntee, 2013; Öljyalan Keskusliitto, 2011).
of 2000 tonnes/year-1 waste oil (Fitzsimons et al., 2009). Oils that can be regenerated include hydraulic, transmission, circulation, lubrication, turbine, and transformer oils that do not contain PCB. They are recovered as base oils which are mainly used in the forestry sector for cutting tools (Ekokem, 2005). Since 2007, a part of the waste oil has been stockpiled by the re-refinery plant (Figure 2b), that is a joint venture company established by two companies. In the joint venture, one company was responsible for the procurement of raw material and the other for the selling of the products to the oil market. The procurement of raw material has succeeded well. Supply agreements have practically eliminated lack of waste oil as a resource for re-refinery process. In 2009, an oil re-refinery plant with the capacity of 60,000 tonnes/year-1 waste oil (Figure 2b) was put into operation (Fitzsimons et al., 2009). It is specialized in the regeneration of used mineral lubricant oil, such as automotive, industrial, and hydraulic oils (L&T Recoil, 2007). The waste oil which is accepted to the re-refinery plant has specific requirements; however, in 2011, 18,000 out of 22,000 tonnes of waste oil collected through the official collection system was treated in this plant. The re-refinery plant has also received waste oil (Figure 2b) from UK, Estonia, and Sweden (Elo, 2010). The batches of waste oil delivered to the plant are sampled and tested to meet the technological requirements. If the waste oil does not meet the required criteria, it is sent to the hazardous waste incineration plant (L&T Recoil, 2007).
tonnes in 2011 (Luoto, 2012), the collection rate of the official collection system is 74%. In 2006 the collection rate was 42%. It should be mentioned that although the amount of waste oil outside the official collection system (≈13,500 tonnes in 2007) can be approximated from the report of Fitzsimons et al. (2009), it was not taken into account in the calculation of the collection rate in Finland. Thus, if the collection rate outside the official collection system were taken into account, the real collection rate in 2011 would have been even higher than 74%. With the implementation of the re-refinery plant, the material recovery rate of the waste oil management system increased from 9 to 87% (calculated within the official collection system by dividing the yearly amount of waste oil sent to the regeneration plant and the re-refinery plant with the yearly amount of waste oil collected). The Ministry of the Environment emphasizes that waste oil collection as an important part of the waste oil management by financing it. In 2008–2010, subsidies were not paid on waste oil collection at all since the main waste oil transportation company was profitable. Reasons for this might be partly the rising prices of crude oil and the increasing efficiencies of the waste oil collection (Fitzsimons et al., 2009). The transportation company may increase the price for the delivered waste oil since crude oil products will have higher values on the market with some delay after the price rises for crude oil.
Analysing of the interconnection flows and outputs of the system
Illegal burning is a common problem in waste oil management. This problem appears due to the irresponsible behaviour of waste oil producers who give their waste oil to the collectors without environmental permits. Illegal waste oil treatment can include burning in small heaters or dumping in soil or water (Fitzsimons et al., 2009). One reason for that is the economically positive value of the waste material. The collectors outside the official system pay for waste oil; therefore, the producer of waste oil preferably gives its waste oil to the collector who pays more (Luoto, 2012). Also municipal authorities do not have enough resources for monitoring this issue.
The result of waste oil management system in the form of the balance of waste oil collection and distribution to processors in 2006–2011 is presented in Figure 3. The total amount of lubricant oil sold in 2011 was 54,000 tonnes (Öljyalan Keskusliitto, 2011). By taking into account the share of collectible waste oil, which is up to 56% of the volumes of new lubricant oil sold (US Department of Energy, 2006), and the amount of waste oil collected through the official collection system, which was 23,000
Identifying main bottlenecks and leverage points of the system changes
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Table 1. Identified leverage points of the waste oil management system in Finland. Leverage point
Identified
Effect on the system
Parameters
Data on waste oil quality Identification of the waste oil type
Rising prices of crude oil
Material stocks and flows
Decreasing the minimum amount of waste oil that can be collected free of charge
Balancing feedback loops
Introduction of the waste oil charge
Information flows
Collaboration of two companies with knowledge on the sources of waste oil and the market situation of the final products of the re-refinery process (base oil) Control of the waste oil collection and treatment by long-duration agreement o waste oil is delivered to the appropriate processor Obligation of treatment plants to have environmental permits Legislation in the Air Pollution Control Act (67/1982) and the Government Resolution on Restricting Incineration of Waste Oil (447/1987) The view on the waste oil system as to increase the efficiency of the waste oil collection. Introduction of the waste hierarchy approach in the waste oil management
Decision as to whether regeneration is appropriate Waste oil to the appropriate processor according to the environmental permits Increase in profitability of transportation companies, due to the price of waste oil delivered to the final processor correlates with the present price of crude oil Decrease in the cost associated with waste handling for such enterprises which generate only small amount of waste oil No need to keep big containers on the storage since waste oil can be collected more often Ensures the possibilities for the financial support for proper waste oil collection and transportation where there is a need Construction of a new re-refinery plant that increases the environmental performance of the system Collection and transportation is financially supported when there is a need
System rules System goals Paradigm out of which the system arises
The percentage of the lubricant oil changed by private vehicle owners themselves has decreased, but it is still considerably high (in 1991, at least 40% of all automobile owners and 95% of farmers) (Lohof, 1991). The amount of waste oil collected in municipal waste collection points is approximately 2000 tonnes/year, and it is usually of poor quality. People are not motivated to collect waste oil separately, and they mix it with other chemicals; thus, the waste oil is not anymore suitable for regenereration processes. Within the analysed system, different leverage points were identified (Table 1).
Conclusions Finland has good experience in waste oil collection and treatment as fuel for heat and power production. The Ministry of the Environment controls the waste oil management system by implementing the contract with the main transportation company and supporting the waste oil collection financially. It also controls the waste oil treatment options through the environmental permits. The waste oil management system analysis shows the increase of performance: the waste oil collection rate increased from 42% in 2006 to 74% in 2011. The environmental performance of the
Decisions as to which kinds of waste can be treated on the plant and to what extent Influences the decision making related to the construction of new plants for waste oil treatment with stricter emission standards Subsidies of waste oil collection and transportation by the Ministry of the Environment Shifting from waste oil energy recovery to material recovery
system also improved, which was evaluated by taking into account the increase of the material recovery rate (9% in 2006 to 87% in 2011). In accordance with the Directive 2008/98/EC, it is a more preferable treatment option. However, to draw more concrete conclusions, a more comprehensive assessment of environmental impacts is required and it will be studied in further research using life cycle assessment methodology. Some of the main bottlenecks of the system, as in the waste management in general, are the lack of controlling environmental authorities and the low motivation of the private vehicle owners to separate waste oil. This can be improved by introducing a payment for the waste oil that is of good quality and suitable for regeneration. The social aspects such as feedbacks on the changes implemented in the system were not considered fully in this study and it can be recommended for the future research topics.
Declaration of conflicting interests The authors declare that there is no conflict of interest.
Funding This research was done within the Clean Oil Project 2012–2014, which is supported by the South-East Finland–Russia ENPI CBC 2007–2013 programme; grant number 2011-028-SE558.
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