Developing the Circular Economy for Lubricants in Europe: TotalEnergies Acquires Tecoil, a Lubricant Used Oil Regeneration Specialist
TotalEnergies has announced its acquisition of Tecoil, a Finnish company specializing in the production of Re-Refined Base Oils (RRBOs). Tecoil operates a production facility in Hamina, Finland, with a capacity of 50,000 tons of RRBOs per year.
The company has developed a circular economy network for collecting and re-refining used lubricants, producing high-quality base oils comparable to virgin oils. This acquisition will enable TotalEnergies to enhance its production of eco-friendly, high-performance lubricants, meeting growing customer demand for sustainable products.
The integration of Tecoil's expertise with TotalEnergies’ existing capabilities is anticipated to boost the company's position in the lubricant market.
- TotalEnergies' acquisition of Tecoil strengthens its capabilities in producing eco-friendly lubricants.
- Tecoil's facility in Hamina adds a 50,000-ton RRBOs production capacity annually.
- The integration of Tecoil’s circular economy network enhances TotalEnergies' sustainability efforts.
- The acquisition supports the growing customer demand for high-performance, environmentally friendly lubricants.
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Insights
The acquisition of Tecoil by TotalEnergies signals a strategic move to capitalize on the growing demand for environmentally friendly lubricants, which is a noteworthy trend within the market. By integrating Tecoil's advanced re-refining process, TotalEnergies can enhance its product lineup, appealing to consumers increasingly conscious of sustainability. This acquisition not only aids in reducing the carbon footprint of lubricants but also positions TotalEnergies as a forward-thinking player in the circular economy.
From a market perspective, this move can potentially increase the company's market share in the lubricant industry, particularly in Europe, where environmental regulations are becoming more stringent. It's important to note that consumer preference is shifting towards sustainable products, offering TotalEnergies a competitive edge. However, the success will depend on the seamless integration of Tecoil's technology and processes into TotalEnergies' existing operations. Missteps during integration could lead to operational inefficiencies, which might affect the company's short-term performance.
From a financial standpoint, the acquisition of Tecoil by TotalEnergies can be seen as a prudent investment aimed at long-term value creation. The ability to re-refine used oils into high-quality base oils can lead to cost savings, as the company may reduce its reliance on raw material imports. Additionally, leveraging Tecoil's existing circular economy network can streamline supply chain operations and further cut costs.
Investors should also consider the potential for revenue growth. The global push towards sustainability is likely to increase demand for products with a reduced carbon footprint and TotalEnergies is well-positioned to benefit from this trend. Although the initial acquisition costs and potential integration expenses may pose short-term financial strain, the long-term benefits could be substantial. The company's diverse portfolio and robust financial performance should help in mitigating any immediate financial risks associated with this acquisition.
TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) announces the acquisition of Tecoil, a Finnish company specialized in the production of Re-Refined Base Oils (RRBOs), which has the most efficient used oil regeneration process on the market today.
Tecoil currently operates a production facility of 50,000 tons of RRBOs per year in Hamina, in eastern
Through a process known as “re-refining”, optimized by Tecoil, used oils are treated to give them properties comparable to the best virgin base oils. These high-quality base oils are used to make lubricants that meet new customer demand for circularity and sustainability. They significantly reduce the lubricants’ carbon footprint while delivering the level of performance expected and approved by many car manufacturers.
“The integration of Tecoil into TotalEnergies will allow us to accelerate the use of RRBOs in the production of our high-end lubricants to meet our customers’ growing demand for increasingly high-performance, environmentally friendly products. We are delighted to welcome the Tecoil teams and combine their know-how in base oil processing with TotalEnergies’ recognized expertise in the production and distribution of lubricants,” says Pierre Duhot, Senior Vice-President Lubricants and Specialties at TotalEnergies.
“Joining TotalEnergies is a great satisfaction and an opportunity to strengthen and develop the activities of Tecoil. It will allow us to jointly build on our work, knowledge, and development of the lubricant sector and meet the new challenges and ambitions of our customers,” said Juha Kokko, CEO of Tecoil.
TotalEnergies, a major player in the production and distribution of lubricants
With 42 lubricant production sites worldwide, TotalEnergies is a partner of choice for players in the automotive, industrial and marine markets. The Company offers innovative products and services. In June 2024, it launched its first range of lubricants made from premium regenerated base oils (Quartz EV3R for passenger vehicles and Rubia EV3R for trucks).
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About TotalEnergies
TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations.
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Cautionary Note
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