Many original equipment manufacturers need to cut their carbon dioxide emissions by more than 10 grams per kilometer to meet the 2015 limits or face penalties for non-compliance, which could run to billions of euros per annum for some, Tat noted. That has OEMs exploring any avenue of improving fuel economy, including the engine oil.

A reduction in oil viscosity can lead to increased fuel economy and reduced carbon dioxide emissions, Tat said. By lowering the lubricant viscosity, engine friction can also be reduced, which is an effective way to improve fuel economy performance.

Tat and Amy Claxton, CEO of My Energy consultancy, agreed that formulators need base oils with higher viscosity index in order to have lower viscosity at low temperatures, while maintaining or tightening Noack volatility limits.

A higher viscosity index is required to meet volatility and viscosity requirements, Claxton noted.

As part of the push toward lighter oils, the Society of Automotive Engineers approved definitions last year for SAE 0W-8 and 0W-12 oils. Tat predicted, though, that demand of such grades wont become significant for years, until vehicles that are new now – or that will be new in coming years – become a large portion of vehicle populations.

It took from the late 1980s until 2006 for SAE 5W-30 to rise to the top market share position, and it will also take a long time for it to exit the market, said Tat. It is likely that the new ultra-low-viscosity grades, like SAE 0W-16, will only be used in new vehicles and not existing ones. This should mean that we may not see significant volumes in the market until 2020, and even then it may only account for a small percentage of the total oil sold.

Eventually, though, demand for 0W-16, -12 and -8 oils should reach high volumes. Claxton warned that the base stock options for formulating such lubricants will further constrict to API Group III+ and polyalphaolefins.

And now OEMs need even lighter engine oils with equivalent or lower volatility, and lower cold cranking simulator viscosity and lower high-temperature/high shear viscosity, she said. Base oil VI at 120 to 122 is not likely to meet the new targets.

The American Petroleum Institute defines Group III stocks as having viscosity index of at least 120. Group III+ is an unofficial category recognized by the industry for marketing purposes as having viscosity index of 130 or more.

There are only a limited number of producers in the world now making Group III+ oil, she said, and their ability to do so is partly determined by the crude oil feedstock that they use. For example, the waxier crudes run at an SK-Pertamina base oil plant in Indonesia and a Petronas refinery in Malaysia provide a VI of approximately 132. By far the largest source of Group III+ is the Shell and Qatar Petroleum joint venture Pearl plant in Qatar, which is part of a refinery turning natural gas into liquid petroleum products.

Some plants that dont currently achieve such VI are theoretically capable of doing so but would suffer significant reductions in output. Group III plants in Western Europe and Asia (not including China) would lose roughly half of their yields if they made process changes necessary to produce Group III+, Claxton said.

Asia currently has capacity to make approximately 2.5 million t/y of Group III, she said. That number would drop to 1.3 million t/y if all of the output were upgraded to Group III+. Likewise, Western Europes capacity would drop from 850,000 t/y to 450,000 t/y, and the Middle Easts would fall from 310,000 t/y to 205,000 t/y.

Claxton and Tat noted that the global market currently has a surplus of Group III capacity, but increases in that capacity are slowing, and only Group III+ oils with VI of more than 130 account for 30 percent of that capacity.

Polyalphaolefins, which are classified as Group IV stocks, can also be used to formulate low-viscosity engine oils. PAO producers have undertaken several expansions recently, but all of them have targeted high-viscosity PAOs, which are used for different applications. No significant expansions have been announced for low-vis PAOs.

Some companies are trying to develop biobased fluids that could serve as high-VI base stocks, but Claxton said large-scale commercialization is still several years away.

Commercially viable options for additional base oils meeting more stringent OEM requirements are limited, she concluded. Base oil suppliers with Group III+ differentiation are in a coveted position in today’s market.

Tat seemed to concur. It is not clear if there will be enough of these [base stocks] to meet demand, which will place increasing investment challenges on all stakeholders. This will also lead to an increased formulation cost.