STUTTGART, Germany – Amid market stagnation, Europe’s lubricants industry faces an unprecedented set of challenges ranging from regulations spurred by climate change to armed conflicts, a leading industry figure said at the Uniti Mineral Oil Technical Forum held here two weeks ago.
Global demand for lubricants declined to 35.8 million metric tons in 2023 from 35.9 million tons in 2007, according to market consultancy Kline & Co. Growth of 8 percentage points in Asia-Pacific was offset by shrinkage in South America, the Middle East and Europe.
In a presentation at the conference, Sebastien Heiner, chief technology officer of Fuchs, pointed to cybercrime, armed conflict, COVID-19, electrification, regulations and climate change as major issues.
Heiner stressed the urgency of addressing climate change above all, citing its profound impacts on supply chains, infrastructure and essential resources.
“I think one thing we have to clearly start and really seriously do, together with our customers along the industry, is establish this circular business model,” Heiner said. “And in order to do this – because this is part of the Green Deal – we have to come up and agree on technical standards, where we recognize that we have been saying this for some time.”
While commending the Green Deal, he cautioned against excess regulatory burdens that could disadvantage European lubricant companies and favor their global competitors.
Heiner also discussed technological shifts, particularly in the automotive sector. Acknowledging the inevitability of transitioning away from internal combustion engines, he underscored the inherent challenges and disruptions associated with new technologies.
Last year, Europeans registered about 12.8 million electrified cars, comprising roughly 24% of total car sales, he said. Germany accounted for about 29% of those sales. Combined with the de facto ban on new ICE sales in the EU by 2035, the effects on Europe’s automotive lubricant business could be profound.
In Germany, Fuchs’ country of origin, there has already been a significant reduction in lubricant demand, from around 1 million metric tons per year to under 800,000 tons, he said.
Roughly two-thirds of all lubricant demand is transportation related, he said, including products for heavy-duty vehicles, with the rest comprised of 20% industrial oils, 3% greases and 6% metalworking fluids.
Global demand for lubricants is barely increasing, having grown on average by 0.7% between 2022 and 2023. The most growth was seen in the Middle East, Africa and Asia. Latin America saw modest growth, Western Europe none and Eastern Europe negative growth. Fuchs predicts overall growth will shrink further to 0.6% per year.