Circular Economy Circular Economy Innovation & Technology

Safety-Kleen & Clean Harbors:
Working Together to Keep Motor Oil in Cars, Out of the Environment

An old Chinese proverb says, “We are all born, grow old, get sick and die,” but those who are interested in sustainability would likely add that we are all then born again. Rebirth and recycling are two themes that have helped us to understand cyclical movement in the business world, and there are a few companies that exemplify those themes.

By Patrick McVeigh | Published 11 years ago | About a 3 minute read

When I first began working in the financial industry in the early 1980s, the very first stock I recommended for purchase was a company called Safety-Kleen. In the 1980s, sustainable business philosophies were just starting to bud, and I was impressed with their closed-loop recycling initiative and its potential to flourish. By using closed-loop recycling, Safety-Kleen ensured that industrial wastes never left their possession, decreasing the chance of hazardous waste escaping into the environment.

Although their business was rather mundane, it was well ahead of its time in terms of environmental protection efforts. Safety-Kleen committed to leasing (rather than selling) old washing machines to automotive garages — a wise move because the responsibility for the disposal of used solvents was left to Safety-Kleen instead of the garages. Without Safety-Kleen’s recycling efforts, harmful solvents would no doubt have made their way into America’s waterways. Safety-Kleen’s service offerings provided collection of solvents on a regular basis and would leave clean solvents in their place. It was a nice business model at the time, but what has made Safety-Kleen a truly sustainable brand was the introduction of re-refining oil and industrial waste.

Dirty solvents were recycled at Safety-Kleen’s factory, converting them into clean solvents for use at auto garages. Safety-Kleen was transforming waste material into a recyclable product, which led to a second tenet of sustainability: profits. Safety-Kleen’s services were in such high demand that they broke the record for the most consecutive years of 20%+ growth in earnings and revenues for any publicly traded company.

But after achieving great success, Safety-Kleen unfortunately met the fate of the Chinese proverb. Following its years of growth, the company “got sick” and made a questionable acquisition. This led to too much debt on the balance sheet and eventually Safety-Kleen filed bankruptcy, putting an end to its sustainable model.

But Safety-Kleen has since been reincarnated, emerging from bankruptcy and adding new life into its old sustainability model. The solvent-recycling model that worked so well in the past is now being applied to motor oil, expanding Safety-Kleen’s reach to consumers. The company now collects used motor oil from auto garages and recycles the waste oil into clean oil to redistribute to the marketplace. In 2008, Safety-Kleen introduced EcoPower recycled motor oil to consumers. With EcoPower, the company keeps motor oil in vehicles and away from America’s waterways, pairing nicely with Safety-Kleen’s business proposition.

Today, Safety-Kleen recycles 146 million gallons of used motor oil per year, giving it roughly 59 percent market share for all re-refined oil in North America, a domination that will continue as only a marginal 20 percent of recovered used oil is presently being re-refined in the U.S. Not only is the company staying healthy this time around, it is thriving and creating alliances that support its environmental services initiatives.

In fact, Safety-Kleen’s second life is defying fate through a purchase by Clean Harbors — is the largest environmental services company in North America focusing on oil recycling, high-pressure chemical cleaning and treatment and materials processing — in December 2012. The combination of services offered by Safety-Kleen and Clean Harbors sets the stage for more sustainable and environmentally sound options for the industrial services industry, helping to keep clean materials in automotive garages across North America.