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April 22, 2014

Volume 7 Issue 3

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India’s CAFE: Cleaner Air, Better Lubes

India’s new fuel economy standards will demand lower viscosity automotive lubricants and more bespoke formulations, an official at a leading oil marketer says.

The country’s Corporate Average Fuel Economy standards, mandated by the  Bureau of Energy Efficiency in February 2014, require the average fuel economy for passenger vehicles to reach 18.2 kilometers per liter by the 2016-17 fiscal year and 22 km/l by 2021-22. The current average is 16 km/l, the bureau said.

BEE officials said the mandate will reduce the country’s fuel demand and lower its vehicular emissions of carbon dioxide. Passenger vehicles in India generate an average of 142 grams of CO2 per km today, but the bureau estimates that the fuel economy standards will reduce that rate to 130 g/km by 2021-22.

Manufacturers that fail to comply will face stiff penalties. Under the 2001 Energy Conservation Act, India already imposes an initial fine of 10 lakh rupees (1 million rupees, or U.S. $16,433) plus 10,000 rupees a day on car makers that fail to meet carbon emission norms based on average emissions of total passenger vehicle sales. A BEE official said the same fines will apply for the fuel efficiency mandates.

Castrol India, which claims nearly 18 percent of India’s automotive lubricants market, says fuel economy benefits can be derived by designing bespoke lubricants. Most of the market in Europe has already moved to lower viscosity fluids to meet the demanding fuel economy norms, a company spokesperson said recently, and India is no different. This would mean a change in base oil and newer, better additives for finished lubricants.

“The key challenge in implementing existing fuel economy solutions in India – especially among Indian original equipment manufacturers  – is to provide a product with the right level of durability and fuel economy, compatible with Indian hardware,” Castrol India’s technology manager, Milind Vaidya, told Lube Report Asia.  “Simply adopting European [fuel efficiency standards] may not work, and hence a bespoke product has to be designed. As a product, lubricants represent a very small percentage of the variable cost for a vehicle. The Indian customer is very cost-conscious and will actually benefit from a higher quality – and higher priced – fuel-efficient lubricant overall.”

India is lagging by two to three years in the emission norms compared to Europe and North America, Vaidya said, mainly due to the poor quality of fuels retailed here. Historically, there was limited focus on reaching fuel economy standards through lubricants in India and by Indian OEMs, and the market has been skewed toward American Petroleum Institute specifications in the passenger car category – for both gasoline- and diesel-powered engines. There is now a change in this view as OEMs have recognized the potential fuel economy benefits from products designed around European Automobile Manufacturer’s Association (ACEA) specifications. Some of the main Indian OEMs, such as Tata motors and Maruti Suzuki, are leading the change.

Use of low-friction lubricants is one of the most cost-effective ways to reduce fuel consumption, Vaidya continued. In moving from a thicker conventional oil such as a 15W-40, to a thinner, new generation of oils including 5W-30 or 0W-30, a fuel economy increase of up to 3 percent is achievable, in both diesel and gasoline cars. Castrol expects the viscometric portfolio to increasingly migrate towards thinner oils in India in the near future.

Castrol India also believes that the recent trend of “thin is in” – led by OEMs like Maruti, Volkswagen, BMW and Honda – will impact India’s lube market in a positive way. Thinner fluids need better quality base stocks and additives to deliver the right performance both in terms of durability and fuel economy.