December 6, 2017
Volume 17 Issue 52
Steady Growth Forecast for Biobased Lubes
Kline & Co. estimates the global biobased lubricants market will grow at a compound annual rate of 5 percent over the next five years out to 2021 – fueled by factors such as increasing availability of high quality biobased base stocks – from an estimated base of 250,000 to 300,000 metric tons in 2016.
“Which is very good, robust growth, taking into account the almost flat growth for the entire finished lubricant market,” Sharbel Luzuriaga, project manager for Kline’s energy practice, said in a webinar Nov. 15. Kline estimates global finished lubricants demand will grow from about 39.6 million tons in 2016 to 41 million tons by 2021.
Luzuriaga explained that an intensifying of supply and demand forces and market dynamics are shaping global demand for biobased lubricants. The supply “push” factors include increasing availability of high quality biobased base stocks, and favorable public opinion and regulations.
“The effect of supply push and market pull is leading to a situation where the scope of biolubricants is expanding into more prospective applications, not only in these niche segments, but also in more bigger, lucrative applications – let’s say gear oils, wind turbine [lubricants] or engine oils for example,” he said, noting that more and more, public entities or authorities are looking to find more effective synergies with the private sector in use of biobased lubricants.
Kline found North America led in biobased lubricant demand in 2016, accounting for around half of the global market. Europe accounted for about a quarter, followed by Asia-Pacific and South America “Due to tight environmental protection policies that are in place, [North America and Europe] are very well known for being the most stringent in these considerations,” he noted.
North America and Asia-Pacific are projected to exhibit growth rates for biobased lubricants demand above that global average to 2021, while Europe and South America will experience growth below 5 percent over that time. Growth in North America will be driven by the Vessel General Permit. The U.S. Environmental Protection Agency’s VGP regulates discharges incidental to the normal operation of commercial vessels in U.S. territorial waters and the Great Lakes. VGP includes specific requirements for products used to lubricate stern tubes and other equipment that may be immersed in or in contact with seawater, referred to as oil-to-water or oil-to-sea interfaces.
In addition to VGP, Luzuriaga cited a variety of other drivers for this growth in demand in North America. “The level of ownership that each state is taking in regards to environmental protection – not only California, but other states in the Great Lakes area, New York for example,” is a key driver, he said. “Also North America is home for key players in the production of premium biobased base stocks.”
The research firm ranked the United States as the largest biobased lubricants market in 2016, with Germany well behind, followed by South Korea, Brazil, Canada and the Nordic countries – Sweden, Norway, Finland, Iceland, Denmark. The top six leading country markets accounted for about 85 percent of total consumption of biobased lubricants in 2016, or about 213,000 to 255,000 tons.
Globally, hydraulic fluids is the product leader in terms of global biobased lubricants demand, accounting for nearly half of global demand. It’s followed by metalworking fluids, chainsaw oils, transformer oils, automotive engine oils, industrial gear oil, greases and 2-stroke and 4-stoke oils.
Kline defines “bio-lubricants” in three ways: biodegradability, toxicity and renewability. He explained that biodegradability means lubricants that biodegrade to their natural state from 60 percent onwards in 28 days, meeting the definition of “readily biodegradable.” Toxicity means lubricants that are non-toxic to the environment, which can be measured by tests devised by the 35-country member Organization for Economic Co-operation and Development and ASTM International. Under Kline’s definition, renewability refers to lubricants with bio-based carbon in excess of 25 percent, in line with the European Committee for Standardization (CEN) 16227, as measured by ASTM D-6866.
Original equipment manufacturers are playing an increasingly important role in biobased lubricants, as strong relationships with automotive and industrial OEMs provide blenders a foundation for expansion. He said Kline found OEMs are also starting to get more involved in approval of biobased lubricants, and more involved in the rising complexity of related lubricant specifications.
The name of the study is “Bio-lubricants: Market Analysis and Opportunities.” The study covers 12 country markets profiles, including China, South Korea, Japan and Australia.