ALBERTA USED OIL MANAGEMENT ASSOCIATION LUBRICATING OIL MATERIAL PRODUCT MANAGEMENT PROGRAM MANUAL FOR COLLECTORS AND PROCESSORS

Transcription

1 ALBERTA USED OIL MANAGEMENT ASSOCIATION LUBRICATING OIL MATERIAL PRODUCT MANAGEMENT PROGRAM MANUAL FOR COLLECTORS AND PROCESSORS SEPTEMBER 2003

2 FOREWARD On April 30, 1997, Environmental Protection Minister Ty Lund announced approval of a regulation establishing the Alberta Used Oil Management Association (AUOMA) as a management board responsible for developing programs to improve the management and recycling of used oil materials in Alberta. The AUOMA is a not-for-profit organization of wholesale suppliers as defined in the Alberta Lubricating Oil Material Recycling and Management Regulation. It is incorporated under the Societies Act (Alberta), managed by a board of directors drawn from its members, retailers, two levels of government and other non-government organizations. The association s objective is to improve the collection and recycling of used oil, oil filters and oil containers through initiatives that support the development of strong, competitive, private sector recycling programs in Alberta. Used oil is the largest single source of hazardous recyclable material in Alberta and poses an environmental problem if improperly managed. At the time of printing this manual, the private sector industry recovers and properly manages about 59 million litres of used oil each year. However, an estimated 29 million litres is disposed of improperly, along with millions of oil filters and containers. The proper recovery and management of these used oil materials is the focus of the AUOMA management board. The AUOMA stewardship program is the result of over four years of collaborative effort and development by Alberta stakeholders. The contributions of the following sponsors are gratefully acknowledged. Canadian Petroleum Products Institute (CPPI) Alberta Environmental Protection (AEP) Alberta Plastics Recycling Association (APRA) Alberta Bottle Depot Association (ABDA) Western Canada Oil/Filter/Container Task Force (WCTF) Alberta Private Sector Recycling Industry Alberta Stakeholders This manual is designed to provide Collectors and Processors with a broad knowledge of the overall program and specific details regarding systems and procedures that affect their businesses. Alberta Used Oil Management Association

3 CONTENTS 1.0 DEFINITIONS INTRODUCTION Background Program Objective Program Framework Program Summary Benefits of Program FREIGHT EQUALIZED ZONES Zoning Objectives Zone Chart RECYCLING INDUSTRY RETURN INCENTIVE (RI) RI Objective RI Guiding Principles Setting and Changing RI s RI Eligible Products RI SYSTEMS REQUIREMENTS Systems Objective Systems Guiding Principles Registration Requirements Payment System Cross Border Movement of Used Oil Materials Program Confidentiality RI PAYMENT BASIS General Used Oil Oil Containers Oil Filters 22 Alberta Used Oil Management Association Page 1

4 7.0 AUDIT REQUIREMENTS Audit Objective Audit Protocol ANNUAL REPORTING General Information 24 APPENDICES APPENDIX A - Collector Registration Application Form APPENDIX B - Processor Registration Application Form A (AUOMA301A) APPENDIX C - Processor Registration Application Form B (AUOMA301B) APPENDIX D - Processor Registration Application Form C (AUOMA301C) APPENDIX E - Sample Recycle Docket (AUOMA102A) APPENDIX F - Oil Collector RI Summary Claim Form (AUOMA102O) APPENDIX G - Filter Collector RI Summary Claim Form (AUOMA102F) APPENDIX H - Container Collector RI Summary Claim Form (AUOMA102P) APPENDIX I - Oil Container Processor RI Summary Claim Form (AUOMA103) APPENDIX J - Burners of Used Oil for Space Heating Processor RI Summary Claim (AUOMA103C) APPENDIX K - Return Incentive Claim and Audit Process (Sample Letter) APPENDIX L - Wholesale Suppliers Registered with AUOMA APPENDIX M - Collector and Processor List Alberta Used Oil Management Association Page 2

5 1.0 DEFINITIONS a) Lubricating Oil means petroleum-derived or synthetic crankcase oil, engine oil, hydraulic fluid, transmission fluid, gear oil, heat transfer fluid or other oil or fluid used for lubricating purposes in machinery or equipment. b) Filter means any spin-on or element style fluid filter that is used in hydraulic, transmission or internal combustion engine applications, and includes a diesel fuel filter but does not include a gasoline fuel filter. c) Oil Container means a container in which lubricating oil is supplied and that has a capacity of 30 litres or less. d) Used Oil Material means lubricating oil, oil filters and oil containers after they have been used for their initial purpose. e) Collector means a government approved carrier that picks up used oil materials from depots and/or Generators and delivers them to a Processor registered with the AUOMA. f) Processor means a government approved receiver of used oil materials that recycles these materials by changing them into value added products which can be sold for purposes other than landfilling and road oiling. g) Environmental Handling Charge (EHC) means a levy paid to the AUOMA by Wholesale Suppliers on the first sale of oil materials in the province to a customer not registered with the AUOMA. h) Return Incentive (RI) means a payment made by the AUOMA to registered Collectors and Container Processors to provide additional economic drive to encourage the collection and processing of used oil materials. i) DIY means Do-It-Yourself consumers who purchase their own oil and service their own vehicles and equipment. These consumers include private motorists, farmers and small commercial generators. Alberta Used Oil Management Association Page 3

6 2.0 INTRODUCTION 2.1 Background At the request of the Canadian Council of Ministers of the Environment (CCME), the Canadian Petroleum Products Institute (CPPI) researched and developed recommendations for the improved management of used oil in Canada. These recommendations were presented to all provinces in early In Alberta, these recommendations were used to begin a consultative process with provincial stakeholders in June This consultative process involved many individuals, groups and associations in the development and testing of a comprehensive plan to improve the management and recycling of used oil, oil filters and oil containers. From the outset, the stakeholders realized the importance of the existing private sector recycling industry in Alberta and planned to build on the success of this industry sector. The intent of the consultative process was to further support the initiatives undertaken by the private sector recycling industry and to further develop and enhance the systems required to increase the collection and recycling of used oil related waste materials in the province of Alberta. The stakeholders considered several options including deposit refund systems and mandatory return systems similar to that in effect in British Columbia for the return of used oil. On June 27, 1995 the stakeholders reached consensus support for the following product stewardship program developed in conjunction with the Western Canada Oil/Filter/Container Task Force. The AUOMA program as it is currently defined, is designed to encourage responsible recycling, to increase the capture rate of used oil related waste materials and to further support the development of the private sector recycling industry in the province of Alberta. Early consensus was reached that enhancements to collection and recycling would occur through incentive programs to expand the reprocessing infrastructure developed by the private sector recycling industry and to address the market areas which had not been fully developed. 2.2 Program Objective The objective for the consultative process which began in 1992 was to design and manage a system that encourages responsible environmental handling and disposal of used oil, oil containers and oil filters through the exercise of active product stewardship, which includes programs providing landfill diversion and recycling of these used oil materials using Alberta Used Oil Management Association Page 4

7 environmentally acceptable options. Such a system shall be designed to achieve the optimum combination of: - efficiency - effectiveness - fairness to consumers and industry stakeholders 2.3 Program Framework The stakeholder consultative process developed a program to be managed by the Alberta Used Oil Management Association (AUOMA) with the following framework: 1. The AUOMA proposal is based on the user pay concept. The program ensures that a fair distribution of the costs associated with collection and recycling of used oil related materials will be tied to the point of sale for the consumer/generator, rather than on the material return. 2. The AUOMA program is designed to have a sunset clause which will enable the Association to cease operations, once the program has fulfilled its mandate to establish a long term mechanism to sustain high returns on collection and recycling of used oil related materials in the province of Alberta and establish a competitive and economically viable recycling industry. 3. The AUOMA will define a performance objective for used oil related material collection and recycling in Alberta. These targets will be used to assess the performance of the Association s activities. The AUOMA will reduce and phase out the incentives when targets have been met and the incentive programs are no longer required. The performance objective will be based on the volume of materials collected and/or the percentage of used oil related materials collected versus volume of virgin product sold. 4. The AUOMA will support only those end uses that provide landfill diversion and environmentally sound recycle/reuse options. Road oiling and landfilling will not be acceptable end uses under this program. 5. The AUOMA will ensure compliance with the operating systems and procedures of the stewardship program through an audit protocol that may be managed by a third party. 6. The focus of the AUOMA program is to improve servicing and enhance the collection of used oil related materials in those markets not adequately serviced, without negatively impacting the collection and servicing of those markets that are well serviced today. Alberta Used Oil Management Association Page 5

8 7. The AUOMA is not a regulatory authority; the Association will not become involved in or own collection and recycling facilities. The AUOMA will in practical terms represent an administrative function which will encourage increased collection and recycling activity within the province of Alberta through the administration of incentive based programs. 2.4 Program Summary The heart of the program is a Return Incentive (RI) paid to private sector Collectors and Container Processors to recover these materials from the environment. The funding mechanism for this RI is an Environmental Handling Charge (EHC) which applies to most sales of new oil and filters. Each litre of oil, each oil container, and each oil filter has an EHC applied to it at either the manufacturer, wholesaler, major retailer or importer level (first seller). The EHC is paid into a fund managed by a not for profit industry management organization called the Alberta Used Oil Management Association (AUOMA). The EHC is a component of the product cost and may be reflected in the price. It is anticipated that this dynamic EHC will be reduced or eliminated over time as the AUOMA program matures. The AUOMA establishes the EHC rates and administers the day-to-day operation of the system in compliance with policies and procedures approved by its Members and Board of Directors. Figure 1 Program Schematic DIY End Consumers Farm /Comm ercial Industrial Resellers Service Stations, Quick Lubes, Mass Merch. Eco-Centers Municipal Recycling and/or Facilities MRF s Farm Agents Collectors Approved/ Collector(s) Transporters/ transporter(s) $ flow Material(s) flow First Sellers of Materials AUOMA Processors Government Approved End uses End uses Alberta Used Oil Management Association Page 6

9 The AUOMA pays Collectors and/or Container Processors a Return Incentive (RI) for the amount of material properly returned for recycling/reuse. The Collectors collect the used oil, containers and filters available from the generators and depots. The flow of material and funds under this program is illustrated in Figure 1, above. Greater amounts of used oil, containers, and filters have been collected from customers without the need for deposit refunds. Early success has shown that this program is more effective than one depending upon mandatory return to retail provisions. General Operating Description Oil, Containers and Filters 1. The simplified model in Figure 1 illustrates the desired flow of material from the Generators (consumers, farm/commercial and industrial users) through the collection network of return depots and Collectors to Processors for re-use. 2. The funding flow of this model also illustrates the EHC is collected on all sales of collectible oil, applicable containers and filter products. 3. The AUOMA program stimulates the return of material by providing an RI to Collectors and/or Container Processors at a level that allows the Collectors to compensate return depots and large generators for their used oil materials, dependent on the competitive market. This gives the return depots the economic drive they require to draw the materials into the system. 4. A significant feature of this program is the existence of the independent return depots (independent of manufacturers and marketers of the products). These independent depots are identified as Eco-Centres in the diagram and are located at existing recycling depots. This provides convenient one-stop recycling centres for consumers. Because these return depots do not directly profit from the sale of the oil and filter products they require another economic drive to exist. 5. The AUOMA program has established freight equalised zones throughout the province, and includes a transportation equalisation component in the RI s for each zone. 6. Supplemental payments, established by the AUOMA, have assisted Eco-Centres during startup. 7. The EHC is applied at the first sale in the province to either a person or an organization that is not registered with the AUOMA. Alberta Used Oil Management Association Page 7

10 Operating Guidelines Oil 1. All oil sold is subject to a cents per litre EHC with the exception of oils either consumed in use (e.g. chain oil) or requiring abnormal special handling (e.g. glycol based hydraulic fluid). 2. Registered Generators with government-approved on-site recycling programs in place for self-generated used oil are treated as integrated Collectors and Processors. Operating Guidelines Containers 1. An EHC is charged on a cents per litre basis for all full oil containers in the program up to and including 20L pails. Although all materials of construction are included in the program, virtually all existing containers today are made from plastic and therefore are the focus of the program. 2. In addition to the RI paid to Collectors of oil containers, a Processor RI is paid to Processors recycling used oil containers. This Processor RI recognises the current market in oil container recycling and is set and managed in the same manner as Collector RI s. 3. Provisions have been approved to allow supplemental incentives to manufacturers to encourage the manufacture of new oil containers using recycled material ( closed loop recycling). Note: This supplemental payment will be used only when circumstances warrant its use. 4. After the program matures, the EHC rate may be set to encourage the most environmentally friendly packaging. As an example a multi-material package may be levied at a higher rate if it contributes to recycling costs higher than those of a single material container. Operating Guidelines Oil Filters 1. The EHC is universally applied to all filters sold. A filter is defined as any spin-on or element style fluid filter used in either hydraulic, transmission or internal combustion engine applications, and includes a diesel fuel filter but does not include a gasoline fuel filter. Alberta Used Oil Management Association Page 8

11 2. There is a two-tiered EHC structure in recognition of significant transportation and processing cost disparities based on filter size. All filters under 203 mm (8 ) in length are subject to one EHC, all other filters are subject to a larger EHC. 2.5 Benefits of Program The benefits of successfully implementing this program are seen to be: Fosters continued development of the private sector recycling industry. Improves management of three waste streams. Promotes landfill diversion. Develops a consumer friendly system. Nurtures the development of new technologies. Improves the efficiency and effectiveness of used oil material recycling. Can be integrated across provincial borders. Requires minimum government regulation. Has support of a broad industry stakeholder group. 3.0 FREIGHT EQUALIZED ZONES 3.1 Zoning Objectives Recognizing that transportation costs are a key component of used oil material collection, the AUOMA has established six freight equalized zones within Alberta. The freight-equalized zones are based on primary and secondary road systems, the volume of used oil related materials available for collection and provincial demographics. The freight equalized zones are required to ensure that collectors are appropriately reimbursed for costs associated with collection, and to promote enhanced capture rates and recycling of used oil related materials in market segments which have historically not been fully developed. The freight-equalized zones are a critical component of the RI system administered by the AUOMA. Each zone has three RIs, one for each used oil related stream (used oil, oil containers and oil filters). Alberta Used Oil Management Association Page 9

12 Figure 2 Zone Chart Return Incentive (RI) Program Alberta Used Oil Management Association Page 10

13 3.2 Zone Chart Figure 2, the AUOMA Zone Chart, indicates the location of the six equalized freight zones throughout Alberta. The freight zones are an integral component of the documentation requirements to substantiate the Collector s invoice to the AUOMA for RI payment. For ease of determining generator zone locations, zone boundaries include full counties, municipal districts, improvement districts and special areas. The establishment of zones assists the AUOMA to assess the efficiency of the collection initiatives. The zones determine where the bulk of used oil related materials are being collected and where improvements in the system are required to enhance collection and recycling. 4.0 RECYCLING INDUSTRY RETURN INCENTIVE (RI) 4.1 RI Objective The objective of the Return Incentive (RI) is to provide an additional economic drive to encourage the collection and processing of used oil materials throughout all markets of the province by the private sector recycling industry. As the Collectors are the key to increased recovery rates, they are the recipients of a RI on delivery of the used oil materials to a Processor registered with the AUOMA. It is the intent of the AUOMA that under normal circumstances, where the used oil materials have not been contaminated or commingled with other waste, these RI s be set to allow the Collectors to compensate the Generators (depots, commercial and private generators) and, where appropriate, the Processors for their handling and processing activities. The AUOMA also pays a processing RI directly to Oil Container Processors. This Processor RI recognizes the current market in oil container recycling and is paid on the quantity of oil container material received from registered Collectors. The RI s are public knowledge. The AUOMA does not get involved in any way with commercial agreements between Collectors and Generators or Collectors and Processors. The competitive market is the deciding factor in these transactions. Alberta Used Oil Management Association Page 11

14 4.2 RI Guiding Principles The following guiding principles are used in the setting of RI s for all three products: 1. RI s will be set to achieve the collection objectives, EHC s will be set to provide the required funding. 2. RI s will be paid for specific performance only. 3. RI s paid to oil container Processors will require reporting of inventory levels. 4. Only one RI per product will be set for each zone for all participants. 5. RI s will be adjusted in a timely fashion with the objective of causing minimal disruption to the normal course of business. 6. All information provided by participants will be held in strictest confidence and will be released only in aggregate form. 7. The AUOMA Board of Directors will make all final decisions relative to the RI s. 4.3 Setting and Changing RI s As this is a new program, the effectiveness of RI incentives is monitored very closely. Changes are made as required to meet our objectives. The triggers of change are: Economic impacts to the private sector recycling industry Used oil materials collected vs. plan Dollars spent vs. plan Changes in business economic fundamentals Input from all stakeholders Inflation and increased costs associated with collection and recycling operations 4.4 RI Eligible Products Table 1 summarizes the collectible used oil materials that are included or excluded from the AUOMA program. Alberta Used Oil Management Association Page 12

15 Table 1 Environmental Handling Charge Payment Schedule Supporting List of EHC Applicable Products and Containers (October 5, 1999) Description Product Container (under 30 L) EHC Applicable on both Product and Container Petroleum crankcase or engine oil Yes Yes Synthetic crankcase or engine oil Yes Yes Hydraulic fluid Yes Yes Transmission fluid Yes Yes Power steering fluid Yes Yes Gear oil Yes Yes Vegetable oil for lubrication Yes Yes Re-refined oil Yes Yes Electrical insulating oil Yes Yes Air conditioning oil Yes Yes Compressor oil Yes Yes Mineral heat transfer fluid Yes Yes EHC Applicable on Container Only Metal working oil No Yes Form release oil No Yes Textile oil No Yes Chain oil No Yes Rock drill oil No Yes 2 cycle engine oil No Yes Gasoline/2 cycle engine oil mixes No Yes Saw guide oil No Yes Rolling oil No Yes Process oil No Yes Dedusting oil No Yes Marine oil No Yes Way oil No Yes Natural gas compressor oil No Yes Conveyor oil No Yes Dripless lube No Yes Quenching oil No Yes EHC Applicable on Filters Spin-on or element style fluid filter used in hydraulic, transmission or internal combustion engine applications including diesel fuel filters Household furnace fuel filter Coolant filter Storage tank fuel filter Yes Yes Yes Yes Alberta Used Oil Management Association Page 13

16 Description Product Container (under 30 L) EHC Applicable on neither Product nor Container Rust preventatives No No Ethylene glycol heat transfer fluid No No Propylene glycol heat transfer fluid No No Silicone heat transfer fluid No No Synthetic aromatic hydrocarbon heat transfer No No fluid Glycol-based hydraulic heat transfer fluid No No Water glycol hydraulic fluid No No Phosphate ester hydraulic fluid No No Hydraulic oil dye No No Polyglycol synthetic compressor oil No No Grease No No Oil additives No No Oil treatments No No Diesel fuel treatments No No Motor flushes No No Winter start fluid No No Brake fluid No No Undercoating No No Penetrating oil No No Hydraulic jack oil No No 3 in 1 household oil No No Aerosol propelled lubricant No No Gun oil No No Kerosene No No Urethane coating No No Sewing machine oil No No Export oil sales No No Cooking oil No No Windshield washer fluid No No Emulsified oil No No EHC Not Applicable on Filters Gasoline fuel filter Air filter Household furnace air filter Filters without a significant metal content such as sock type filters No No No No Note: Any oils not specifically exempted above are EHC applicable. If you have any further questions on applicable products, please contact AUOMA at Alberta Used Oil Management Association Page 14

17 5.0 RI SYSTEMS REQUIREMENTS 5.1 Systems Objective The AUOMA has established the supporting systems for this program with the objective of achieving the simplest method that will integrate normal accounting requirements with the typical practices of the recycling industry. 5.2 Systems Guiding Principles The following guiding principles were used in the development of the program systems: new system will cause minimal disruption to existing private sector recycling system system must leave an appropriate audit trail all processes must be simple and easy for participants to use systems must not restrict the free flow of products in the competitive market all technologies providing acceptable end uses must be treated equally all participants must register with the AUOMA payments will be for specified performance only 5.3 Registration Requirements The AUOMA is not a licensing body. The Association relies on existing government approvals, licenses and permits to screen eligible industry participants under the AUOMA program. The AUOMA requires that each participating Collector and Processor register with the Association by submitting the appropriate forms and provide documentation verifying that the company has the required government approvals with respect to their specific operations. Upon receipt of the registration application, the AUOMA reviews the information, approves the application based on the applicant s ability to provide appropriate registration documentation, and assigns a company specific registration number for each Collector and Processor. The AUOMA maintains an active database of registered Collectors and Processors who provide the services required for the AUOMA to fulfil the mandate of the stewardship program. Documentation requirements to substantiate the AUOMA registration are as follows; Alberta Used Oil Management Association Page 15

18 Collectors Collectors of used oil material must register with AUOMA by completing a Registration Form (AUOMA201) with a copy of the company s Alberta Safety Fitness Certificate and verification that the company drivers maintain current TDG training. Materials to be collected must be specified on Registration Form AUOMA201. Processors (Receivers) In Alberta Processing facilities in Alberta which process more than 10 tonnes of hazardous recyclable used oil materials per month must complete Processor Registration Form A (AUOMA301A) and provide the AUOMA with a copy of their Alberta Environment Operating Approval. Processing facilities which process less than 10 tonnes of hazardous recyclable used oil materials per month, and other Processors that do not currently require an Alberta Environment Operating Approval, must complete Processor Registration Form B (AUOMA301B), including verification of compliance with all applicable codes and regulations. Processors (Receivers) Outside Alberta Collectors wishing to use Processors (Receivers) out of province must ensure these Processors are registered with the AUOMA. To register, out of province Processors must complete the appropriate Processor Registration Form AUOMA301A or AUOMA301B and provide copies of valid permits/licenses from their governing jurisdictions. Note: For interprovincial transport of Hazardous Recyclable Used Oil Materials, most provinces require Collectors (Carriers) to have a valid Carrier Number, complete required manifests and deliver to a Processor (Receiver) with a valid Receiver Number. On-Site Processors Generators with government approved on-site recycling programs for self-generated used oil materials may apply in writing to the AUOMA for registration. Applicants must provide details of collection, recycling, volume verification and copies of government approval. If approved, these Generators are registered as integrated Collectors and Processors and as such are eligible for base rate RI s (Zone 1). Alberta Used Oil Management Association Page 16

19 5.4 Payment System Collector Upon delivery of the used oil related material to a Processor registered with the AUOMA, the Collector must have the Processor sign a Recycle Docket or Summary Docket accompanying the delivery. Where the Collector and Processor represent the same company, two signatures are required unless approval for a single signature has been authorized by the AUOMA. A sample Recycle Docket has been included for reference purposes in the Appendix as Form AUOMA102A. In addition to information currently included on most Recycle Dockets today, the AUOMA requires the following items for purposes of verification of return incentive claims: a) Signature and phone number of Consignor/Generator b) Signature of Consignee/Processor (Receiver) c) AUOMA Registration Number of Processor (Receiver) d) Applicable AUOMA Zone e) Water content as a percentage of total volume for used oil f) Volume of contamination for filter drums g) Weight of contamination for oil container deliveries Invoices sent to the AUOMA for RI payment must be substantiated by utilizing an AUOMA Return Incentive Summary Claim Form (AUOMA102). The RI Summary Claim Form must summarize the volume of used oil, number of filter drums and weight of plastic collected by the Collector, by zone. The Summary form must also include the Collectors specific Recycle Dockets that support the invoice to AUOMA. Please note that Return Incentives may only be claimed in respect of used oil materials collected within the previous 100 days of the date the properly completed claim form is received by AUOMA. Return Incentives will be paid in 30 days from receipt of complete claim forms by AUOMA. Best efforts will be made to issue cheques on the 30 th day of the month for invoices received by the 10 th of that month and cheques issued on the 15 th of the month for those received by the 25 th day of the previous month. Documentation requirements administered by the Collector and Processor must be maintained for a minimum two year period. This information must be maintained for audit purposes. Please see Collector Systems Flow Chart Figure 3 for a graphical presentation of this process. Alberta Used Oil Management Association Page 17

20 Figure 3 COLLECTOR SYSTEMS FLOW CHART REGISTRATION Do You Have A Registration Number As A Collector With The AUOMA? NO Complete Collector Registration Form AUOMA 201 And Receive Registration Number YES COLLECTION Collect Used Oil Materials On Your Own Commercial Terms Complete Recycle Docket Including Zone Location And Generator Signature And Phone Number Deliver To Processor Registered With AUOMA And Have Recycle Docket Signed By Processor PAYMENT Complete RI Summary Claim, Form AUOMA 102 And Send To AUOMA (Complete with Supporting Recycle Dockets) Receive Return Incentive From AUOMA Alberta Used Oil Management Association Page 18

21 Oil Container Processor Processors of used oil containers will be required to maintain appropriate documentation as a basis for invoicing the AUOMA for Processor Return Incentives. Registered Processors are required to submit monthly statements on: a) Quantity of used oil container materials received from registered Collectors b) Current quantity of inventory of used oil container materials c) Quantity of sales and disbursements of used oil container materials (including the sales for closed-loop recycling) Note: Processor Return Incentives will not be paid for inventory of container materials beyond a reasonable working inventory. Invoices sent to the AUOMA for Processor RI payments must be substantiated by utilizing an AUOMA Return Incentive Summary Claim Form (AUOMA103). This Summary Claim Form must include the weight of used oil containers received by the processor and include the Collectors Recycle Dockets making up the weight being invoiced. These supporting Recycle Dockets must be maintained for a minimum two year period for audit purposes. 5.5 Cross Border Movement of Used Oil Materials The AUOMA s mandate is to enhance the capture rate of used oil related materials and to ensure that these materials are appropriately recycled. It is not AUOMA s intention to restrict the movement of used oil related materials to approved processing locations which from an economic perspective make good business sense. Therefore, the AUOMA does not restrict Alberta based Collectors from transporting used oil materials to approved processing facilities in other governmental jurisdictions. Collectors wishing to use an out of province Processor, must ensure that the Processor is registered with the AUOMA. The out of province Processor must complete the appropriate Processor Registration Form AUOMA301A or B and provide documentation verifying that all requirements of their governing jurisdiction have been met for the receiving facility. Information confirming the status of these facilities must be submitted to the AUOMA to substantiate an invoice for RI payment. It is the responsibility of the out of province Processor to comply with the AUOMA s RI system requirements so as to ensure system integrity. Out of province Processors are included within the scope of the AUOMA s audit protocol. Alberta Used Oil Management Association Page 19

22 5.6 Program Confidentiality Under the AUOMA program, information with respect to specific Generators, Collectors and Processors is kept confidential. The volume of used oil related materials collected and the financial reimbursement to individual Collectors and Processors is not disclosed. Information released by the AUOMA represents aggregate industry statistics only. 6.0 RI PAYMENT BASIS 6.1 General The AUOMA program recognizes the common practices of industry with respect to used oil material collection and verification of volumes and weight by Collectors. These are: used oil litres determined by tank dips oil filter 205L drum or equivalent oil containers weight in kilograms Recognizing that no perfect system exists for the verification of volume and weight measurements, and that the mandate of the AUOMA program is to minimize administrative impacts to the recycling industry, the Association has endorsed the historic industry operating practices at this time. 6.2 Used Oil The AUOMA pays Collectors a RI for used oil based on the volume collected determined by tank gauging. Collectors are responsible for dipping their truck tanks before and after each pickup to determine the volume of used oil collected from each generator location. Generators are responsible for verifying the volume of used oil collected by signing the Collector s Recycle Docket. AUOMA s Program limits contaminants in used oil eligible for a Return Incentive (RI) to a maximum of 1% solids and the following water content: a) 0 5% water RI eligible with no volume discount b) Over 5% - 35% water RI eligible when volume discounted for water above 5% c) Over 35% water Not RI eligible Alberta Used Oil Management Association Page 20

23 Water content and solids (BS&W) in used oil must be determined by ASTM D86, D95, D96, Karl Fischer method or equivalent. Used oil containing contamination in excess of the limits noted above may be subject to a surcharge administered by the Collector. The surcharge is not included within the scope of the AUOMA program. The surcharge, if any, must be administered by the Collector and it will be market driven. Generators are required to pay any surcharge directly to the Collector. Used Oil Processors must sample and test all incoming loads of used oil for BS&W and provide results with the signed receiving document. All used oil samples for testing must be representative of the entire load being received by using one of the following methods in accordance with ASTM D4057 or approved equivalent: In-line sampling (discharge line) Bottle or beaker sampling (all-levels sample) Tube sampling (all levels sample) Note: Sampling and testing the receiving tank after delivery is not acceptable. Free water content determined by paste cut must be deducted from volume received prior to testing for BS&W. Processors receiving contaminated used oil may surcharge the Collector for the additional operating costs associated with processing this used oil. Used oil containing contamination in excess of the limits noted requires a volume adjustment. The Processor must deduct the volume of water greater than 5% but less than 35%, from the total volume of the used oil received, and note the water corrected volume on the Collectors Recycle Docket or Summary Docket. The water corrected volume of used oil must be used by the Collector to substantiate an invoice to the AUOMA. 6.3 Oil Containers The AUOMA pays Collectors a RI for used oil containers based on the weight of empty containers collected from each generator location. The Generator must verify the weight of containers by signing the Collectors Recycle Docket. The RI is paid for bundled containers which do not contain commingled solid waste. Bundled oil containers containing other solid waste may be subject to a surcharge administered by the Collector. The surcharge is not included within the scope of the AUOMA program. The surcharge, if any, must be administered by the Collector and it will be market driven. Generators are required to pay any surcharge directly to the Collector. Alberta Used Oil Management Association Page 21

24 Processors receiving bundled used oil containers commingled with other solid waste may surcharge the Collector to cover the additional operating costs associated with sorting and waste removal. Processors must be in a position to weigh the used oil containers delivered to them. This weight adjusted for contamination must be recorded on the Collector s Recycle Docket or Summary Docket. If there is a discrepancy between the cumulative total on the Collector s Recycle Docket and the Processors receiving weight, the Processors weight shall be used to substantiate an invoice to the AUOMA. 6.4 Oil Filters The AUOMA pays Collectors a RI for drums of acceptable used oil filters delivered to a registered Processor based on the total unprocessed weight prorated by zone determined by the number of 205L drums of filters collected in each zone. All weights must be verified by weigh scale tickets. (Example: total weight 3360 kg with 20 drums from zone 1 and 10 from zone 2 equals a zone 1 weight of 2240 kg and a zone 2 weight of 1120 kg). Collectors must document the number of oil filter drums collected from each generator location. The Generator must sign the Collector s Recycle Docket verifying the number of full and partially full drums collected. Collectors of used oil filters must also include some form of drum identification by Generator on all Recycle Dockets. This drum identification number must provide a traceable link between the drum on the Processors floor and the Generator of that drum. Processors will be responsible for verification of load weight and number of full and partially full drums received. Processor must weigh all incoming loads and provide a weigh scale ticket to the Collector. Processors receiving drummed oil filters commingled with other solid waste may surcharge the Collector to recover the additional operating costs associated with sorting and waste removal. The Processor must deduct the weight of waste received and note the corrected weight on the Collector s Recycle Docket or Summary Docket. The corrected weight must be used by the Collector to substantiate an invoice to the BCUOMA. Collectors may surcharge Generators for drummed oil filters containing other solid waste. The surcharge will not be included within the scope of the AUOMA program. The surcharge, if any, Alberta Used Oil Management Association Page 22

25 must be administered by the Collector and it will be market driven. Generators will be required to pay any surcharge directly to the Collector. Note: Collectors who are also Processors must treat all internal loads received at their processing plant to the same weight and quality checks as external Collector loads. All filter RI claims submitted by Collectors who are also Processors must be completed on a batch basis by Collector and must include a signed receipt with weigh scale ticket from the end user (i.e. metal broker or other approved end user) for the processed weight by batch. Note: When Processors accept small volumes of filters from other Collectors that cannot be economically batched alone, they will assume responsibility for any contamination and accuracy of drum weights with these filters when they batch them with their own. When this occurs the Processor must include copies of all Receiving Dockets making up the batch clearly showing the Collectors, the weight and the date of receipt. Collectors and Processors are responsible to inform the AUOMA of quality issues associated with drummed oil filters prepared by the Generator and to administer a self monitoring assessment program which focuses on ensuring that all drum volumes are properly recorded and free of contamination. 7.0 AUDIT REQUIREMENTS 7.1 Audit Objective A significant component of the AUOMA program focuses on auditing the used oil material collection operation for each industry participant. The AUOMA has developed an audit protocol which may be administered by a third party consultant. The AUOMA audits serve as an assessment function to the program to ensure system integrity. The AUOMA has adopted an assessment philosophy which focuses on maintaining fair, consistent and appropriate follow-up action. 7.2 Audit Protocol The AUOMA audit protocol determines compliance with the operating systems and procedures of the stewardship program. AUOMA s audits take two forms; spot audits which focus on identifying gross errors and/or detailed audits which assess the documentation requirements, accounting practices and invoicing processes. Alberta Used Oil Management Association Page 23

26 The audits verify the amount of collected used oil materials claimed versus actual. Audit results are used to determine the frequency of future audits. The AUOMA audit protocol also includes a provision to ensure that Collectors and Processors registered under the program remain in good standing with provincial government agencies. The AUOMA may cancel or suspend the registration of any Collector or Processor if they fraudulently contravene the operating systems or procedures of the program. 8.0 ANNUAL REPORTING 8.1 General Information Under the terms of the Lubricating Oil Material Recycling and Management Regulation, AUOMA must report program performance to the Minister annually. As specified by the Freedom of Information Act, these reports are available to the public. Alberta Used Oil Management Association Page 24

27 APPENDIX A Collector Registration Application Form (AUOMA201)

28 1050, Scotia 1, Scotia Place Jasper Avenue Edmonton, Alberta T5J 3R8 Telephone: (780) Facsimile: (780) AUOMA Collector Registration Application Form Company Name Mailing Address City Province Postal Code Phone Fax Please check materials you are capable of transporting. Estimated quantity/year Used Oil Used Oil Filters Used Oil Containers Check Zones in your service area: Please note that the following legible documentation must be included for registration with AUOMA: Copy of Safety Fitness Certificate if truck 18,000kg or greater, if less than 18,000kg include a copy of insurance documents (include brief description of truck) Copy of approval from governing body or Business License/permit (i.e. municipality, town) Copy of Transportation of Dangerous Goods (TDG) Training Certificate If storing materials, attach a listing of all facilities (include locations, description and storage volume) Valid Alberta Carrier # (if applicable) Certification I,, certify that the information provided on this form [Print Name and Title] is correct. I further acknowledge that I have read, and agree to be bound by, the terms and conditions on the reverse. Signature Phone Number AUOMA USE ONLY AUOMA Registered Collector Number Date Authorization AUOMA 201 October 2001

29 TERMS AND CONDITIONS In consideration of the Alberta Used Oil Management Association (the "AUOMA") accepting the registration of the applicant, and in consideration of the applicant becoming eligible to receive payment from AUOMA of Return Incentives, and in consideration of the applicant's agreement to exercise his powers and carry out his duties in accordance with the Environmental Protection and Enhancement Act (the "Act"), any regulations made under the Act (the "regulations"), and in consideration of the covenants contained herein, the applicant agrees as follows: 1. The applicant represents and warrants that all information provided to AUOMA in this application, and in all documents required by virtue of the applicant's registration with AUOMA, or by virtue of the requirements of law, are true and accurate. 2. The applicant agrees to indemnify and hold AUOMA, its employees and agents, harmless for all costs, expenses, claims, demands and actions that may arise as a result of any untrue or inaccurate statement or information provided by the applicant. 3. The applicant agrees to be bound by AUOMA bylaws, programs, policies, and procedures. 4. The applicant agrees to provide AUOMA with all reasonable information relating to this Application or any matter that relates to the program or procedures of AUOMA and agrees that AUOMA has a right of access to any and all such information during normal business hours and on 24 hours notice to the applicant. 5. The applicant agrees to provide, at the request of AUOMA, all documentation, receipts, entries, or information that may support or relate to any claim for return incentives to AUOMA, upon request. 6. The applicant hereby acknowledges and agrees that any funds, return incentives, payments, advances, paid under AUOMA programs are paid subject to verification of any information requested by AUOMA, and subject to all required information being correct and sufficient for the purpose of AUOMA. 7. Any registration granted, or any payment made by AUOMA, where there is a false certificate by the applicant, or false or misleading information provided by the applicant, shall be considered to have been granted or paid in mistake. Any such registration is void and any such payment is held in trust by the applicant for the sole and exclusive benefit of AUOMA. Such payments or funds shall be returned forthwith to AUOMA upon either AUOMA's or the applicant's discovery of the error. 8. AUOMA maintains the right, at its sole discretion, to withhold any payment or registration of application, until sufficient verification or information has been provided by the applicant in relation to any manner reasonably requested to be verified by AUOMA. 9. AUOMA reserves all rights and remedies provided to it under law that may be in addition to any terms contained herein. 10. The applicant acknowledges AUOMA's authority to make bylaws, policies and procedures and agrees to be bound by any bylaws, policies and procedures made by AUOMA. 11. The applicant acknowledges and agrees that AUOMA may cancel or suspend the registration of the applicant if the applicant contravenes the Act, the Regulations, or the bylaws, or upon any false or misleading representation made in any application or claim form for payment of AUOMA's Return Incentive. The applicant acknowledges and agrees that AUOMA may cancel or suspend the registration of the applicant if: (a) the applicant ceases to carry on business; or (b) the applicant applies to surrender his certificate of registration to AUOMA. 12. The applicant agrees to surrender his certificate of registration to AUOMA if the applicant's registration is cancelled or suspended. The applicant agrees he will not be entitled to, and will not participate in, carry on, business under AUOMA's programs unless he is registered and his registration is not under suspension.

30 APPENDIX B Processor Registration Application Form A (AUOMA301A)

31 1050, Scotia 1, Scotia Place Jasper Avenue Edmonton, Alberta T5J 3R8 Telephone: (780) Facsimile: (780) AUOMA Processor Registration Application Form A For all Processors (Receivers) of Hazardous Recyclable Used Oil Material Storing In Excess of 10,000 L or Kg Processor Name Mailing Address City Province Postal Code Phone Fax Materials to be Processed: Used Oil Used Oil Filters Used Oil Containers Please note that the following legible documentation must be attached for registration with AUOMA: Government Approval (e.g. Environmental Protection and Enhancement Act) Municipal license/permit Alberta Receiver Number (if applicable): Approval and Receiver Number Apply to: Used Oil Used Oil Filters Used Oil Containers Signatures of those authorized to sign off dockets on behalf of the Processor (sign & print name below) - attach additional names on a separate page if necessary Certification I,, certify that the information provided on this form [Print Name and Title] is correct and verify that none of the used oil materials received will be used for the purpose of landfilling or road oiling. I further acknowledge that I have read, and agree to be bound by, the terms and conditions on the reverse. Signature Phone Number: AUOMA USE ONLY AUOMA Registered Processor Number Date Authorization AUOMA 3O1A January 2002

32 TERMS AND CONDITIONS In consideration of the Alberta Used Oil Management Association (the "AUOMA") accepting the registration of the applicant, and in consideration of the applicant becoming eligible to receive payment from AUOMA of Return Incentives, and in consideration of the applicant's agreement to exercise his powers and carry out his duties in accordance with the Environmental Protection and Enhancement Act (the "Act"), any regulations made under the Act (the "regulations"), and in consideration of the covenants contained herein, the applicant agrees as follows: 1. The applicant represents and warrants that all information provided to AUOMA in this application, and in all documents required by virtue of the applicant's registration with AUOMA, or by virtue of the requirements of law, are true and accurate. 2. The applicant agrees to indemnify and hold AUOMA, its employees and agents, harmless for all costs, expenses, claims, demands and actions that may arise as a result of any untrue or inaccurate statement or information provided by the applicant. 3. The applicant agrees to be bound by AUOMA bylaws, programs, policies, and procedures. 4. The applicant agrees to provide AUOMA with all reasonable information relating to this Application or any matter that relates to the program or procedures of AUOMA and agrees that AUOMA has a right of access to any and all such information during normal business hours and on 24 hours notice to the applicant. 5. The applicant agrees to provide, at the request of AUOMA, all documentation, receipts, entries, or information that may support or relate to any claim for return incentives to AUOMA, upon request. 6. The applicant hereby acknowledges and agrees that any funds, return incentives, payments, advances, paid under AUOMA programs are paid subject to verification of any information requested by AUOMA, and subject to all required information being correct and sufficient for the purpose of AUOMA. 7. Any registration granted, or any payment made by AUOMA, where there is a false certificate by the applicant, or false or misleading information provided by the applicant, shall be considered to have been granted or paid in mistake. Any such registration is void and any such payment is held in trust by the applicant for the sole and exclusive benefit of AUOMA. Such payments or funds shall be returned forthwith to AUOMA upon either AUOMA's or the applicant's discovery of the error. 8. AUOMA maintains the right, at its sole discretion, to withhold any payment or registration of application, until sufficient verification or information has been provided by the applicant in relation to any manner reasonably requested to be verified by AUOMA. 9. AUOMA reserves all rights and remedies provided to it under law that may be in addition to any terms contained herein. 10. The applicant acknowledges AUOMA's authority to make bylaws, policies and procedures and agrees to be bound by any bylaws, policies and procedures made by AUOMA. 11. The applicant acknowledges and agrees that AUOMA may cancel or suspend the registration of the applicant if the applicant contravenes the Act, the Regulations, or the bylaws, or upon any false or misleading representation made in any application or claim form for payment of AUOMA's Return Incentive. The applicant acknowledges and agrees that AUOMA may cancel or suspend the registration of the applicant if: (a) the applicant ceases to carry on business; or (b) the applicant applies to surrender his certificate of registration to AUOMA. 12. The applicant agrees to surrender his certificate of registration to AUOMA if the applicant's registration is cancelled or suspended. The applicant agrees he will not be entitled to, and will not participate in, carry on, business under AUOMA's programs unless he is registered and his registration is not under suspension.