Complex sentence: The used oil is first tested to determine suitability for re-refining, and is first dehydrated in order to removes water, which is then treated before being released to the environment.
Split into simpler sentences: The used oil is first tested to determine suitability for re-refining. Once a shipment of used oil is deemed suitable, it is first dehydrated, a process which removes water which is then treated before being released to the environment.