The global lubricants market is poised for growth, driven by sustainability trends, regulatory changes, and rising demand for eco-friendly alternatives in automotive and industrial applications, Shriya Verma, Associate Consultant, Specialty Chemicals at ChemBizR, tells OGN

The global lubricants market, which was around $150 billion in 2023, is expected to grow 2.5 per cent between 2024 and 2030.

Lubricants are primarily used in industrial applications, followed by automotive, aerospace, marine, and others.

The lubricant industry has changed dramatically as a result of e nvironmental concerns and government regulations.

For instance, the use of Per- and polyfluoroalkyl substances (PFAS) a diverse group of thousands of chemicals used in hundreds of types of products in food-grade lubricants used in manufacturing has been largely phased out.

Automakers are always looking for ways to improve the efficiency, reliability, and performance of their vehicles.

As a result, there is a growing need for advanced lubricants that provide better wear protection, increased durability, and lower emissions.

As hybrid and electric vehicles gain popularity, traditional lubricants become less relevant, creating a new market for specialised fluids known as EV fluids (e-fluids).

THE GREEN WAVE IN THE LUBRICANT MARKET

Industry players are beginning to take into account the full lubricant lifecycle, from the procurement of raw materials to disposal.

Natural oils and other sustainable alternatives are increasingly used in modern lubricant formulations, with a shift from Grade I to V base oils.

These Grade V oils are made from synthetic esters, which are known for their high performance, sustainability, and durability, making them ideal for modern applications such as EVs and cooling technologies.

Grade V base oils are designed to perform exceptionally well in extreme temperatures, maintaining viscosity and stability with ease.

These oils have lower volatility than Grade I base oils, so they evaporate less at high temperatures, leading to lower emissions of harmful compounds.

At the same time, bio-lubricants are gaining popularity in the global market as businesses seek environment-friendly alternatives.

Technological advancements are resulting in high-performance bio-lubricants with improved properties such as better lubrication, higher viscosity, and increased biodegradability.

Researchers are looking into new sources of bio-lubricants, such as algae, plant oils, and waste cooking oils, which could broaden the market for sustainable lubricants.

Waste cooking oils and plant oils are still in the research stage, whereas microalgae have been commercialised.

DIC Corporation and Checkerspot are collaborating to create new algae oil-based lubricant additives that can enhance machinery performance in industrial and automotive applications.

Companies are now introducing lubricants made from re-refined base oils (RRBOs) and regenerated base oils, indicating a shift in the industry’s sustainability practices.

Both regenerated base oils (RBBOs) and RRBOs are made from used oils; however, RRBOs are refined using more sophisticated methods, returning the oil to almost virgin quality and making it ideal for high-performance uses.

RRBOs can save up to 85–90 per cent of CO2 emissions compared to using new, virgin base oils.

Interest in re-refined base oils has grown, particularly since Russian oil supplies were reduced due to the war in Ukraine.

Re-refined base oils have emerged as an appealing and sustainable alternative for the lubricants industry.

Avista Green, a company that refines used lubricating oils, promotes the use of RRBOs in marine lubricants and cylinder oils.

TotalEnergies is heavily investing in RRBOs as it responds to the energy and lubricant industries’ shift toward greener practices.

Stellantis, for example, collaborated with TotalEnergies to launch a new sustainable motor oil made from regenerated base oils.

TotalEnergies recently acquired Tecoil, a Finnish company that manufactures RRBOs.

Tecoil’s plant in Hamina, Finland, produces 50,000 tonnes of RRBO per year and has a strong network for collecting used lubricants throughout Europe.

Castrol, in collaboration with Safety Kleen, has also launched MoreCircular, a new line of lubricants derived from recycled base oils.

Safety Kleen collects used motor oils for re-refining, and Castrol blends this re-refined oil with its own additives to produce high-quality lubricants.

REGULATIONS DRIVE THE PUSH FOR SUSTAINABLE LUBRICANTS

Stringent environmental regulations around the world are driving up demand for bio-based/sustainable lubricants.

The EU has been a leader in promoting environmentally acceptable lubricants (EALs). EALs are more biodegradable, less likely to accumulate in the environment, and less toxic to aquatic life than standard lubricants.

The growing emphasis on sustainability will significantly push the demand for EALs in the coming years.

The EU is also planning to ban the sale of new diesel and petrol cars over the next decade to meet its net zero emissions target, which could further stagnate the lubricant market, particularly in the automotive sub-cluster.

The US Environmental Protection Agency (EPA) has set high standards for reducing emissions and improving fuel efficiency (reduced friction), which necessitate the use of low-viscosity and high-performance synthetic lubricants.

Like the European government, the US is taking slow yet steady steps to phase out the sale of diesel and petrol cars in the coming few years.

The EPA’s Vessel General Permit (VGP) regulation requires lubricants used in conditions where they may come into contact with water to be biodegradable, ensuring their environmental friendliness.

Additionally, the FDA has established a few new rules on lubricants that may come into contact with food during production.

The regulation lists specific chemicals allowed in these lubricants, such as butylated hydroxyanisole (BHA) and butylated hydroxytoluene (BHT).

Only areas like machinery parts, gaskets, and seals where there is little to no contact with food are suitable for using lubricants. FDA approval is required for lubricant grades that are intended to come into contact with food.

India recently implemented the Extended Producer Responsibility Act (EPR). Under new EPR rules, companies that produce or import base oils and lubricants must set up systems for collecting and recycling used oil. These companies are required to recycle at least 5 per cent of all collectible used oil.

This target will gradually increase and will reach 50 per cent by 2030.

The Indian government has also introduced Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) to push the adoption of electric vehicles, leading to reduced reliance on ICE vehicles.

This would be an interesting battle for the Indian market, as the phase-out of ICE vehicles will take time, implying that the demand for lubes for these vehicles will continue roughly for more than a decade.

GLOBAL INSIGHTS INTO LUBRICANTS MARKET DEMAND

The global lubricants and fuel additives market was valued at roughly $19.5 billion in 2023, with the US holding the largest market share, followed by China.

The US market for lubricants is very mature, leading to stagnancy in development and experimentation.

The market is shaped by strict environmental regulations set by the EPA, which mandate high-quality lubricant usage.

This in turn leads to reduced intervals for oil changes and overall consumption of lubricant, explaining the market maturity.

On the other hand, in Asia, where mineral-based lubricants were once common, there is a noticeable shift toward synthetic and semi-synthetic lubricants.

China and India are expected to drive the most growth in the lubricants market, owing to ongoing industrial development and an increase in international investments and collaborations.

India is a major player in the global lubricant market, ranking as the third-largest market for finished lubricants. However, it struggles with insufficient domestic production of base oils.

India produces over 1 million tonnes of base oil annually but imports over 2.5 million tonnes each year.

The most commonly used base oil in India is API Group II (petroleum-based oils), which makes up around 60 per cent of the market, followed by Group I, Group III, and naphthenic oils.

The rise in demand for base oil in India is linked to the adoption of Bharat Stage VI (BS-VI) emission standards from April 2020.

BS-VI engines require high-performance lubricants, and these lubricants need high-quality base oils with lower volatility and improved thermal stability.

Lubricants formulated with high-quality base oils help vehicle manufacturers and operators meet regulatory requirements for emissions and performance.

International companies such as Repsol, Shell, and Exxon are increasingly interested in investing in India’s base oil market.

With anticipated growth in demand due to trade developments, closures of Group I base oil plants, a shift to lighter viscosity (Group V), new plant capacities, and advancements in manufacturing technology, the base oil market in India is expected to expand significantly over the next five years.

Some companies are already making the move to invest in the Indian lubricant industry.

ExxonMobil (US) is investing $110 million in India by building its first lubricant manufacturing plant in Maharashtra, India.

The company aims to enhance operational efficiency, improving productivity and reducing downtime for local manufacturers, while also incorporating sustainable practices in its operations.

Hindustan Petroleum Corporation Limited (HPCL) has teamed up with Chevron Lubricants (US) to introduce Caltex lubricants across India.

This new partnership will combine Chevron’s global expertise with HPCL’s strong distribution network to offer tailored products for the Indian market.

Reliance Industries (India) and BP (UK) have been selling lubricants in the Indian market under a joint venture called Reliance BP Mobility Limited (RBML), operating under the brand name Jio-bp.

FUTURE OUTLOOK

The growth of sustainable lubricants and re-recycled base oils will likely accelerate as advancements in technology improve their performance and cost-effectiveness.

However, with the need for scalable production and potential supply chain disruptions, this transition will be difficult.

The long-term success of this shift will depend on the industry’s ability to integrate sustainable practices while maintaining economic and functional effectiveness.

Continued investment in research and development, along with supportive policies, will be crucial for achieving sustained market transformation.

By Abdulaziz Khattak