TAYRAŞ, Türkiye’s first and only facility that produces high quality and low carbon footprint base oil from used lubricants with hydro-treatment technology, protects the future of our planet and provides sustainability benefits, while creating added value for the national economy.
As we farewell 2023 and prepare to welcome 2024, we come together with TAYRAŞ CFO Emre Hamzaoğlu and talk about TAYRAŞ’ contribution to the national economy.
Base oils stand out as an important import item in lubricant production. How does TAYRAŞ benefit the national economy with its base oil production?
Approximately 800.000 tons of lubricants are produced in Türkiye annually and supplied to domestic and foreign markets. Nearly 600.000 tons of this amount is met from imported base oils. This corresponds to an approximately 750 million dollars import. TAYRAŞ produces 45.000 tons of Group II+ base oil annually and meets nearly 10% of the import-dependent base oil supply. This contributes to the foreign trade balance of our country and thus to the current account deficit. This contribution reaches 50 million dollars per year with the SCT (Special Consumption Tax) provided by base oil.
What is the contribution of TAYRAŞ’ upcycling activities to the national economy in terms of taxation?
At its advanced technology Group II+ Base Oil production facility, TAYRAŞ produces water-clear, high-quality Group II+ base oils from waste oils that have completed their useful life. Since the product offered to the market is within the scope of SCT, we create approximately 70 million TL of SCT every year. When we add 200 million TL VAT to this, an annual tax potential of 270-300 million TL is created. The VAT generated from the recorded 60.000 tons of waste oil amounts creates a volume of 75 million TL. When we look at it from a broader perspective, TAYRAŞ brings 60.000 tons of unregistered waste oil into the economy every year and prevents a tax loss of 350 million TL. In addition, the benefit it provides to the current account deficit by producing from waste instead of direct imports, which I have just mentioned, is also above the benefit we provide in the tax area. On the top of all these, approximately 70% less carbon footprint is produced compared to base oils produced from crude oil.
As we say farewell to 2023 and prepare to welcome 2024, what kind of a future do you foresee for TAYRAŞ and the lubricants industry?
In recent years, we have witnessed developments such as the pandemic and the Russia-Ukraine war, which have shrunk the economies of countries on a global scale and disrupted supply chains in international trade. Some of these events coincided with the investment period of TAYRAŞ. We managed to keep our project schedule by maintaining our calmness during these times. The sector we operate in is recycling and the work we do is upcycling. We produce high value-added products from waste and contribute to both the environment and the national economy. I believe that our greatest strength lies in the fact that we are a company that produces and creates added value. As a matter of fact, thanks to this ability, we won several prizes and awards in 2023. We won the first prize of İnovaLİG “Innovation Strategy at SME Scale” organized by the Turkish Exporters Assembly (TİM). Our project “Upcycling of Waste Lubricants with the Most Advanced and Environmentally Friendly Technologies Available” also got the first prize in the Waste Management category of the 10th Sustainable Business Awards organized by the Sustainability Academy. Finally, we were deemed worthy of the first prize with our “Waste to Clean Energy” project at the 8th Efficiency Project Awards ceremony organized by the Ministry of Industry and Technology of the Republic of Türkiye.
The disruption of the supply-demand balance, as major markets had to restrict their supply due to the pandemic and war, changed consumption habits. It was once again understood that reducing external dependency, re-evaluating own resources, and reusing waste over and over again rather than using fossil resources are better choices. In 2023, the increase in waste lubricant collection rates and the increase in the trade volume of TAYRAŞ confirm this fact.
The Carbon Border Adjustment Mechanism (CBAM), the first phase of which will be implemented in 2023 within the framework of the European Green Deal, was an important step taken on a global scale towards the goal of reducing carbon emissions and ultimately becoming carbon-neutral. As TAYRAŞ, we are leading the process of preparing our country for the circular economy within the framework of UN Goals and EU Legislation; we further strengthen our pioneering role with our strong and stable financial structure and new investments. With its refining facility in Bilecik in the most popular sector of our times, TAYRAŞ offers consumers the highest quality products in the nearby geography. For this reason, we firmly believe that we will emerge stronger from any negative scenario we may face in the future and that we will be a leading actor in our sector in the future of our country.
