If you store oil at your workplace (motor oil, hydraulic fluid, lubricants, transformer oil, or any other), the law requires secondary containment. Not as a precaution, but as a legal obligation and compliance starts with understanding what your site actually requires. One litre of oil can contaminate up to a million litres of water, and once oil reaches a stormwater drain, the clean-up cost and EPA liability fall on you. This guide works through the six questions that determine exactly what you need to comply from the type of oil you're storing through to the right product for your site.
What type of oil are you storing?
The first thing to establish is how your oil is classified, because this shapes every requirement that follows. Australian Standard AS1940:2017 (The Storage and Handling of Flammable and Combustible Liquids) is the national benchmark, and it applies across every state and territory. Most oils handled in Australian workplaces fall into Class C2 — combustible liquids with a flash point above 93°C — and the bunding requirements are the same across all of them.
Motor oil, hydraulic fluid, lubricating oil, transformer oil are the most common in workshops, fleet operations, and industrial sites. If this is what you're storing, standard AS1940:2017 rules apply and a bunded pallet is your straightforward solution.
Gear oil and transmission fluid are used in heavy machinery, mining equipment, and agricultural operations. Also Class C2, same requirements. Often stored in drums or IBCs on-site for equipment servicing.
Cutting oils and metalworking fluids are common in machining workshops and CNC operations. Most fall under Class C2, but formulations vary — check your SDS to confirm.
Cooking oil and vegetable oils stored in bulk (food manufacturing, commercial catering) are also subject to the same bunding requirements if stored in sufficient quantities. Worth knowing if that applies to your operation.
Used or waste oil is the exception. Contamination from fuel residue, heavy metals, or other chemicals can lower its flash point, potentially reclassifying it as Class C1, a higher-risk category. In New South Wales, collecting used oil from offsite also requires an Environment Protection Licence. Keep waste oil in a separate, clearly labelled container — ideally its own bund. For any product you're unsure about, the Safety Data Sheet (SDS) will confirm the exact classification and flash point.
What are you storing it in, and how much?
Your container type and volume determine your minimum bund size. The rule is straightforward: your bund must hold the greater of 110% of the volume of your largest single container, or 25% of the total combined volume of all containers stored within the bund. You apply whichever figure is higher. That is your legal minimum net capacity.
For most workshops storing drums, a single 205L drum requires a bund with at least 226L net capacity. If you have two drums, the calculation still gives 226L as the minimum, because 110% of the largest container (205L) outweighs 25% of the combined total (410L). At 25kg, a drum pallet is practical to reposition if your storage layout changes.
- Premium 2 Drum Bunded Pallet: 230L sump capacity, holds 2 × 205L drums, SWL 500kg, removable grates with drain outlet. Chemical-resistant polyethylene. $529 inc. GST.
For IBC storage, a standard 1,000L IBC requires a minimum of 1,100L net capacity. It's Australian-made, UV stable for outdoor use, and includes dual removable grates and a drain outlet so accumulated liquid can be managed correctly. Two IBCs still only require 1,100L minimum (110% of the largest single container still wins over 25% of 2,000L combined), so one IBC bunded pallet remains sufficient.
- Single IBC Bunded Pallet: 1,300L sump capacity, suits 1 × 1,000L IBC, static load 3,600kg, 2-way forklift entry, drain outlet. Australian-made HDPE, UV stable. $1,864 inc. GST.
One point many businesses get wrong: net capacity is not the same as the bund's empty volume. Every container placed inside displaces some of that volume. A bund listed at 1,300L gross may hold less once an IBC is seated inside it. Always ask your supplier for the net sump capacity figure, not wall height multiplied by floor area, and verify this before purchase.
Are you storing one type of oil or several?
For most sites, this is straightforward: a single product, a single bund, done. But if you're storing more than one oil type together, there are two things to check.
The first is capacity. When multiple containers share a bund, the 25% rule applies to their combined volume, and you compare that against 110% of the largest single container. Whichever is greater is still your minimum. A common scenario: a 1,000L IBC of hydraulic oil and two 205L drums of motor oil in the same bund. The IBC dominates the calculation (110% of 1,000L = 1,100L), so a single IBC bunded pallet with a 1,300L sump covers the lot.
Chemical Compatibility
The second is chemical compatibility. Motor oil, hydraulic fluid, lubricants, and transformer oil are all Class C2 and broadly compatible with the same HDPE or polyethylene bund materials, so storing them together is generally fine. The situation changes if you're mixing oil with a C1 liquid (such as diesel) or with a chemical from a different hazard class altogether. In those cases, the higher-risk classification governs the bund requirements, and segregation may be required under AS/NZS 3833.
Used or waste oil deserves its own container and ideally its own bund. Beyond the classification issue covered earlier, mixing waste oil with new product can create contamination problems that complicate both disposal and compliance. Keep them separate.
Where are you using it, and is this permanent or temporary?
Location and storage duration both affect which product you need and what obligations come with it.
For indoor, permanent storage, a fixed bunded pallet is the standard solution. HDPE and polyethylene are chemically compatible with oils and most hydrocarbons, and together with a sealed floor provide a compliant secondary containment setup. Uncoated concrete alone is not sufficient; the surface must be genuinely impervious.
Outdoor storage introduces a rainwater problem. Water accumulating in an outdoor bund reduces available containment capacity and is likely contaminated, which means it can't simply be discharged without testing and approval. Where oil is stored outdoors on an ongoing basis, a covered setup (such as a bunded pallet with a fitted cover and frame) significantly reduces this management burden and is recommended wherever practical.
If the need is temporary rather than ongoing (a maintenance job, equipment servicing, or a short-term field operation), portable options exist. The Collapsible Bund range is built from 900gsm PVC fabric with self-supporting sidewalls and folds flat for storage. Sizes range from 300L through to 5,400L, making them suited to everything from a single drum changeout to a large plant maintenance job. For lower-volume situations, the PVC SpillBund provides a low-profile containment perimeter in sizes from 36L up to 2,400L, useful for containing drips around equipment or during maintenance activities where a rigid pallet isn't practical.
- Collapsible Bund: 900gsm PVC, self-supporting walls 300mm high. Sizes from 300L (1,000 × 1,000mm) to 5,400L (6,000 × 3,000mm). Folds flat for storage. From $850 inc. GST.
- PVC SpillBund: Flexible low-profile perimeter bund, 100mm wall height. Sizes from 36L to 2,400L. Deployable instantly, no assembly required. From $262 inc. GST.
One important compliance note: AS1940:2017 is explicit that portable bunding is not an acceptable solution for fixed, ongoing storage. If oil sits in the same location day after day, a permanent bunded pallet or built bund is required, not a collapsible one.
Which compliance standard applies to you?
AS1940:2017 is the national technical standard that sets the minimum requirements for bund capacity, materials, physical integrity, and construction. It applies everywhere in Australia. But state EPA legislation and WHS regulations sit on top of it. Both apply, and the stricter requirement always wins.
New South Wales regulates most sites through local councils, with EPA NSW directly managing operations that hold an Environment Protection Licence. Collecting used oil from offsite requires an EPL under the POEO Act. Victoria introduced a general environmental duty under the Environment Protection Act 2017, which means businesses must proactively prevent environmental harm, not just react after a spill. EPA Victoria recommends double-walled tanks or bunding for all oil storage above minor quantities. In Queensland, WorkSafe QLD administers the WHS Act 2011 for Class C oils, with Brisbane City Council adding local guidelines for urban sites. South Australia has one of the most prescriptive frameworks: petroleum storage licences have been mandatory since January 2020, and EPA SA's Bunding and Spill Management Guide addresses oils and lubricants directly. Western Australia requires a dangerous goods storage licence above defined thresholds under the Dangerous Goods Safety Act. Tasmania's 2015 EPA Bunding Guidelines and the ACT's 2019 Petroleum Storage Guidelines both apply directly to oil storage, and the Northern Territory takes a strict approach near waterways under the Petroleum (Environment) Regulations 2016.
If you're unsure whether your site requires a licence or registration (particularly in SA, WA, or NSW for used oil), contact your state regulator before setting up storage.
Disclaimer: Requirements vary by state, industry, volume, and site conditions. This guide is based on AS1940:2017 and publicly available state EPA guidance. Confirm your specific obligations with your relevant regulator or a qualified environmental/WHS adviser.
Could a spill reach any of these?
This is the question regulators ask first when assessing liability. Stormwater drains, unpaved soil, waterways, traffic areas, and adjacent properties are all sensitive receptors. The closer your oil storage is to any of them, the higher the scrutiny and the greater the consequences if something goes wrong.
The physical setup of your bund needs to reflect this. If oil storage sits near a floor drain or stormwater grate, a sealed bunded pallet with correct liquid management is essential. If proximity to a waterway or residential area is a factor, a covered, enclosed solution with documented maintenance becomes even more important. Regulators reviewing a spill incident will ask whether the containment setup was adequate given the site's risk profile. "It came with the property" is not a defence.
A spill kit is a necessary complement to any bunding setup, but it is not a substitute. Spill kits clean up after the fact. Bunding prevents the spill from reaching a drain in the first place. Regulators are clear on this distinction, and a spill kit alone will not satisfy your containment obligations.
What maintenance does your bund need?
A bund that isn't functional isn't compliant, regardless of what was originally purchased. Regular checks should cover three things: physical integrity (no cracks, failed seals, or gaps at joints, as any structural breach is a containment failure), net capacity (reassess whenever the number or size of containers changes, or if accumulated liquid has reduced usable volume), and liquid management (water or residue in the sump must be tested before discharge or pumped out correctly, depending on whether contamination is present).
There is no nationally mandated inspection frequency under AS1940:2017, but industry best practice is a monthly visual check and a formal documented inspection annually or after any spill event. A simple maintenance log is also worth keeping. If your site is ever audited, it demonstrates active management rather than a set-and-forget approach.
Not sure which bunding is a right for your site?
Frequently Asked Questions