Waste oil heaters are capable of burning so-called "waste fuel," which is oil that's been contaminated at some point. Waste oil heaters allow operators to burn used engine oil and other oil that's normally recycled or disposed of.
Normal heating oil is essentially the same as diesel fuel, and furnaces and boilers are designed to burn it as efficiently as possible. As a result, a small amount of contamination within the fuel can make combustion inefficient or even cease. Furnaces and boilers that burn heating oil can sometimes be converted to use other types of oil, but they often lose efficiency after conversion.
Waste oil furnaces and boilers are designed to burn a wider range of oils, and many are tested with used automobile oil and other types of oil often thrown away. They promise to allow operators to use oil that would otherwise be disposed of, often at a cost.
Furnaces and boilers that can burn waste oil are generally less efficient that standard units, and they can also release more dangerous chemicals, making effective ventilation especially important. In addition, they can only take waste fuel not contaminated by potentially dangerous chemicals. Waste fuel heater regulations vary considerably, and some areas might ban their use due to the potential for environmental harm.