BUDAPEST, Hungary – The Union of the European Lubricants Industry announced last week the formation of a sustainability task force charged with developing a framework to measure the sustainability of lubricant companies.
Officials emphasized that the group is working proactively to define requirements that the European Union is already beginning to introduce for the industry.
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The formation was announced here Oct. 25 at UEILs Annual Congress by Apu Gosalia, vice-president for sustainability & global intelligence at Fuchs Petrolub. Gosalia is chairman of the task force, which will evolve into a full-fledged committee of the association at a later stage.
The task force will commence in January 2019 and will essentially function as a think-tank in its first year. We need more flexibility and breathing room in the early stages. Not everything is set in stone yet regarding requirements, targets and timeframe, Gosalia told the congress. Three task force meetings are planned for the next year, mainly to be held in Brussels.
One of the main tasks is to write a framework for lubricant suppliers to report about their sustainability. Around the world there is growing interest in sustainability – the idea of businesses and individuals taking more responsibility for their impact on the environment and society. Gosalia said European lubricant suppliers also have a business interest in developing a standard; since 2017 the European Union has required public interest entities and businesses with at least 500 employees to file non-financial declarations on sustainability and diversity, including information about key performance indicators (KPIs) for ecological impact, such as energy consumption and carbon footprint. He contended that at some point, the regional body will extend that requirement to smaller companies and begin to mandate that businesses meet some level of sustainability.
We dont want to end up with a situation where everyone understands something else on sustainability in our industry and in the end we all lose against external regulatory bodies who will then define the standard for us, Gosalia said. That is why we need to develop a standard for our own lubricants industry in Europe by ourselves, and this can be achieved in the sustainability task force and later in the sustainability committee.
For the past three years, Fuchs worked with raw material suppliers of the lubes industry to develop a standard for measuring the carbon footprint of its supply chain. Gosalia said ecological impact will be one criteria of the sustainability framework but there will also be others – measures of a businesss economic sustainability and of its social impacts.
We need KPIs beyond performance and price for selling lubricants, also on the basis of sustainability criteria, Gosalia said. For the ecological dimension it is important that the industry starts working toward a lifecycle assessment, measuring impacts at every point in the process and along the value chain. For example, not everything that is biodegradable must be sustainable per se. In the same vein, the products that are not biodegradable may still very well be considered sustainable. It depends on our definition and calculation of sustainability at every stage of the process and value chain.
Gosalia contended that lubricant companies should actually receive credit for their social impact. Noting that some 30 percent of global energy production is lost to friction, wear and corrosion, he told the audience that the industry needs to draw attention to the fact that its primary focus is to reduce all of these.
Many stakeholders to our industry still think of it as black, dirty and ugly, he said. This is not the case. We reduce more CO2 with our products in their use phase than we actually produce in making them. This message needs to reach young people in particular if the industry is to attract the best talents in the future, he said, as the next generation expects different things from employers than in the past. It is no longer only about money, the career or job security. It is working for a good and sustainable company that they want.
Gosalia said it is noteworthy that organizations other than lubricant companies will be allowed to participate in the task force. For the first time, the entire process and lubricants industry value chain will work together, from raw material suppliers to lube blenders, customers and end-of-life treatment representatives, he added.
The task force will cooperate closely with the European Re-refining Industry Section of the UEIL and the unions Health, Safety and Environment Committee, as well as the Sustainability Initiative of the German Lubricant Industry (NaSch), which Fuchs helped to form under the umbrella of the German Lubricants Manufacturers Association (VSI). It also plans to coordinate with external parties.
We do not have to reinvent the wheel and do everything by ourselves, Gosalia told the audience. If EU bodies have done the right work on appropriate sustainability methodologies, and most of them have, then we must talk to them and take their methodologies. We need to work towards creating a coalition of the willing.