Lubricants — Way Forward (Challenges, Sustainability And Opportunities)

Lubricants find wide application across automotive, industrial, marine and aerospace sectors with a wide range of products, including engine oils, hydraulic oils, gear oils, greases and speciality lubricants, each catering to specific applications and performance requirements. The need for higher efficiency, reduced environmental impact, and compliance with stringent regulations triggered advancement in lubricant formulation in the last 3 decades. The market has witnessed the development of bio-based, synthetic lubricants and functional fluids that offer superior performance and reduced carbon footprint vis-à-vis conventional mineral-based lubricants. Increasing drain intervals in the automotive and industrial sectors and the modest impact of electric vehicles in the future are likely to hinder market growth in the next 10-year horizon. More precise viscosity selection is getting more focus and importance. New methods to restrict contaminant invasion into the system are being used. Use of smart filter carts to clean new or used oil without needing separate attention is in place. A renewed focus on lubricants' air handling ability and varnish management to keep varnish in check is being practiced.

Fuel economy, which is more relevant for on-road application development of ‘Plus’ base stocks, has helped the industry to move to lower viscosity grades. A typical SAE 5W30 requires base stocks with lower volatility to meet engine test requirements at lower viscosities. Before introducing Group II+ base stocks, manufacturers had to rely on using Group III base stocks to blend SAE 5W30. Focusing on Group II+ base stocks, CCS and NOACK volatility are improved compared to Group II base stocks. You can have a single tank with Group II+ base stocks against 2 tanks with Group II and Group III base stocks on logistics too. The other advantage is the price point when you use a Group II+ against a combination of Group II and Group III.

The shift towards renewable energy sources and increasing demand for EVs are shaping the future landscape of the lubricant market, with manufacturers focusing on innovative solutions tailored to these emerging applications.

For the last decade or a little more, mineral oil growth has been flat, while that of synthetic oil, year after year, is outpacing the growth of mineral oils. We are witnessing some big changes in the type of lubricants being used in various applications. We are already seeing huge disruption in automotive base oils, particularly in the PCMO segment. 15 years from now, there will be much more focus on using renewable base stocks, which will be sustainable and environmentally degradable oils.

Prominent Drivers of the Lubricant Market.

1. The growing automotive industry, particularly in emerging markets like Asia Pacific and Latin America, is fuelling the demand for engine oils, transmission fluids and other automotive lubricants.


2. Automotive, transport and increase in construction and infrastructure development in developing regions will generate demand for lubricants in various industrial applications for categories of oils such as hydraulic fluids, gear oils and metalworking fluids.


3. Improved product performance, durability, and environmental sustainability are driving the development of synthetic and bio-based lubricants.


4. Growing demand for electric vehicles (EVs) is reshaping the lubricant market, creating new opportunities for lubricant manufacturers to meet the increasing demands for specialized lubricants and greases designed for electric drivetrains, bearings and cooling systems.

Challenges faced by the lubricant market:

1. Environmental Regulations and Sustainability: Aimed at reducing carbon emissions and minimizing the environmental impact of lubricants, leading manufacturers to develop eco-friendly products that comply with these regulations, leading to higher R&D costs.


2. Volatility in raw material prices particularly the volatility in crude oil/base oil prices.


3. Intense Competition and Market Saturation: The lubricant market is highly competitive with numerous global and regional players vying for the market share. Mature markets like Europe are witnessing stagnating demand for traditional lubricants. To stay competitive, manufacturers are focusing on product differentiation, innovation, and value-added services, but this requires substantial investments in R&D and marketing.

The growth in EV sales has already started affecting the sales of higher-profit conventional automotive oils. The decreasing trend in traditional lubricants is forcing the lubricant manufacturer and associated aftermarket to look for new revenue sources. Changing legislation and tighter CO2 targets are driving OEMs to develop electrified vehicles at a fast pace.

Over 65% of new vehicles will be hybrid or electric by 2030. Battery Electric Vehicles (BEVs) will represent 32% of the production by 2030. Hybrids will represent 34% of global production by 2030, with mild hybrids (MHEVs) dominating. Several OEMs and countries have announced ICE bans. Next-generation electrified designs will bring a more challenging environment for the lubricant, increasing voltages, different temperature profiles, more copper wiring, electronics and structural plastics. E-hardware operates at extremely high speeds and has different frictional requirements. Ever-tightening efficiency targets along with the need for improved heat transfer drive fluids to lower viscosities where durability becomes a tougher challenge. Failure in an electric vehicle could have more severe consequences than in a conventional vehicle. Conventional fluids will not deliver the performance required in the latest electric vehicle drivelines.

The key challenges for e-fluid will be:
-Suitable electrical properties
-Preventing copper corrosion and ensuring load-carrying
-New material compatibility
-Lowering viscosity for heat transfer while retaining durability
-Severe thermal oxidation stability and oil sludge control.

Balancing these demands will be crucial. This shift will open up opportunities in the e-fluid space since they will contribute to enhancing EV performance, durability and range.

However, this gain in e-fluid sales will not be uniform but more restricted to countries that will see the highest EV penetration level. By 2025, nearly 40 million litres of e-transmission fluids, e-thermal fluids and e-greases will be sold across eight countries—Germany, Norway, the UK, France, the Netherlands, China, the US and Japan.

Such projections depend primarily on the overall adoption rate of e-fluids, which is anticipated to be around 30% for e-transmission fluids, 40% for e-greases, and 60% for e-thermal or cooling fluids by 2025. 30% and 40% of all EVs sold will have e-transmission fluids and e-greases, respectively, installed in them at the factory level. The first fill will account for more than 90% of the market, with service fill making up the balance of 10% by 2025. The service fills market for e-thermal fluids is likely to be even less at only 0.5% of the first fill counterpart due to first fill for life or late adoption. Revenues, limited as they are, will be generated by ad-hoc services related to accidents, battery replacements or damage, and dealership warranty concerns.

While the first fill market for e-fluids will scale in parallel with EV production volumes, service fills are expected to ramp up, plateau, and decrease by around 2045 as a result of two counteracting trends: the increasing EV parc using e-fluids versus the extended service.

Nanomaterials have emerged as potential environment-friendly lubricant additives to upgrade conventional lubricants such as automotive oils, industrial oils, greases and metalworking fluids. The application of nanoparticle additives is based on the application of solid lubrication and is mostly used as anti-wear, anti-friction and extreme pressure additives. Their various advantages include small enough size, thermal stabilities, a variety of particle chemistries, and a high reaction rate with the surface without an induction period. These advantages translate into longer equipment operation, increased fuel efficiency and extended maintenance intervals. Technological trends and literature analysis show that significant progress has been achieved with the application of nanomaterials based on carbon, metals, metal oxides, metal sulphides, metal borates, and metal carbonates in improving the properties and performance of lubricants. In addition, nano lubes are commonly used from non-toxic material, making the lubricant environment-friendly.

Different trends are observed in different geographies as far as grease use is concerned. In general, the production of lithium complex greases has significantly increased due to the versatility and stable performance of this thickener. Aluminium complex greases are also becoming popular. Poly Urea Greases are used to combat higher temperature requirements due to higher speed and load. Calcium sulphonate greases are being tried out but have some limitations to the 100% replacement of lithium complex greases. As regards the future, we may see the usage of functional soaps (like lithium-bismuth) non-polar thickeners (poly-non-urea), nanoparticles, liquid crystals and bio greases making inroads.