Israeli fly ash is highly basic when exposed to water, due to the very low sulfur content allowed in coal imports because of the strict environmental regulations (with respect to SO, emissions). Thus, the fly ash is a potential chemical neutrallization/fixation agent for acidic wastes. In this study, coal fly ash has been examined as a neutralization/fixation agent for acidic sludge produced from the regeneration of used engine oils. The initial results show that the fly ash can be used as a very efficient neutralization/fixation agent of the sludge. Furthermore the trace elements and the organic components are efficiently fixed within the fly ash particles. The product can serve as a good aggregate in concrete production. The neutralization and fixation processes are discussed in detail.