TCEP Technology

In July of 2009, we launched our newest business, which we refer to as our Thermal Chemical Extraction Process or TCEP Technology. This business is within our Refining & Marketing Division and utilizes a licensed technology developed by Vertex Holdings, L.P. (a privately held, related party to Vertex Energy, Inc.) to convert used motor oil, or black oil, into a refining feedstock or diesel replacement that can be used in all grades of residual fuel blends. The process utilizes thermal and chemical dynamics to extract impurities from the used motor oil at a facility in Baytown, Texas.

The process has both system and method patents filed and relies on technology that was developed and tested by members of Vertex Energy’s management team. The TCEP technology was run on a batch basis for several months in 2008 and is currently running on a continuous basis. Since July of 2009, we have been selling our TCEP end product to a large international fuel trading company.

By combining our inherent advantages within our Black Oil Division to source and move used oil feedstock at attractive prices with our licensed TCEP technology that produces a higher value end product, we are able to capture an increased portion of the margins in the used motor oil value chain. Our intent is to develop additional TCEP facilities domestically and to potentially expand our existing capacity in the future.