ILMA Compoundings – March 2019 - 16

"At the end of
the day, the
primary benefit
of the rule is its
pre-emption."
- Jeff Leiter,
general counsel, ILMA
In the 1980s and early 1990s, ILMA led a coalition of
industry stakeholders, including NORA, An Association
of Responsible Recyclers, in opposing U.S. Environmental
Protection Agency (EPA) efforts to label used oil as
hazardous waste. Proposals under consideration could
have subjected used oil, under all circumstances, to costly
handling procedures.
Arguing that strict management made such regulation
excessive, the coalition succeeded in keeping the "hazardous
waste" tag out of the EPA's 1992 Used Oil Management rule.
"A group of stakeholders argued that if properly recycled,
used oil should be allowed to be managed as nonhazardous
waste, which would encourage recycling," said Leiter.
Threading through these efforts, along with dramatic
improvements in re-refining technology, was the question
of labeling. Could labels accurately state recycled oil's
equivalency to virgin oil, assuring consumers and businesses
that they were buying safe and effective products?
The FTC's 1995 Recycled Oil Rule created parameters
for answering that question in the affirmative. In Section
311.4, Testing, the rule stated that manufacturers claiming
"substantial equivalency of processed used oil with new
oil for use as engine oil" must use the test procedures of
American Petroleum Institute (API) Publication 1509,
"Engine Oil Licensing and Certification System" (EOLCS).
EOLCS violators could be subject to civil penalties,
imprisonment and court injunctions.
Recycled Oil Rule Review
In 2017, the FTC announced that the Recycled Oil Rule
was scheduled for review. The action wasn't sparked by
any demonstrated need or significant trend in recycled oil
labeling but by the question of whether the passage of time
meant that updates were needed.
"When the FTC adopts regulations, they have to
periodically undertake a review, to see if it needs to be

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MARCH 2019

| COMPOUNDINGS | ILMA.ORG

amended or whether it's still good," said Leiter. "The
Recycled Oil Rule popped up on the radar screen as one of
the rules that had not been reviewed in a while."
The FTC sought answers to a list of targeted questions,
including: Is there a continuing need for the rule? What
benefit has the rule provided to consumers and businesses,
and does the rule impose any significant costs? What
modifications should be made, if any?
ILMA's Automotive Lubricants Committee reviewed the
questions and concluded that the rule had worked well for
more than two decades. In particular, the rule pre-empted
any moves toward conflicting state requirements, declaring
that "no law, regulation, or order of any State or political
subdivision" could require a container of recycled oil to bear
a label not identical to that allowed by the Recycled Oil Rule.
Pre-emption allows "uniformity across the United States
with respect to container labeling," said Leiter. ILMA's
comments noted "a continuing need for" the rule.
"If the rule were to be rescinded, some states may elect to
require their own container labeling mandates that could
result in varying requirements across jurisdictional lines,"
ILMA CEO Holly Alfano wrote in submitted comments.
"This potential 'patchwork' of state regulations is unworkable
for the industry and also could create needless confusion
for consumers."
Other commenters, including NORA and API, reached
similar conclusions. Re-refiner Safety-Kleen noted that the
rule "provides a standardized, objectively verifiable test that
can be used to refute false claims," observed the FTC in its
final ruling.
"You would think that a lot of folks would say the rule
is old and not needed any longer, but everyone said it was
doing what it's supposed to do," said Leiter.
One change sought by ILMA, NORA and API addressed
testing standards. The language should, as ILMA phrased
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