The U.S. Department of Agriculture has published draft guidelines requiring federal agencies to use biobased products, a mandate aimed at spurring demand for lubricants and other products made from crops.
The proposed regulation would require government agencies to buy materials such as motor oils, hydraulic fluids and metalworking fluids made from plants as long as they perform adequately and do not cost significantly more than conventional alternatives. Observers said it should help create a critical mass for vegetable-based lubes.
We hope to start seeing some volume demand from this program in calendar year 2004, said Luis DelValle, global marketing director for Cargill Industrial Oils and Lubricants. We think it could really snowball from there and give biobased products a chance to take off.
The Federal Biobased Procurement Program was authorized in 2002,and the Department of Agriculture has been working since then to develop specific steps for implementation. One of the biggest steps was to develop definitions of biobased. Definitions, including minimum content levels for vegetable-based products, were included in the proposed rule published Dec. 19. Motor oils for water-cooled engines would have to contain 10 percent vegetable oil, total loss lubricants 50 percent, metalworking concentrates 30 percent, transformer oils and dielectric fluids 70 percent.
Agencies are not required to buy biobased yet. The Department of Agriculture will accept comments on the proposed rule for 60 days, after which it could be adopted. Once the rule is adopted, federal agencies will have one year to submit plans documenting their procurement of biobased products or explaining why they are not buying them. The requirement applies to materials for which an agency spends $10,000 or more per year.
The procurement program also provides funds to subsidize performance testing for biobased products.
Lubricants made with soybean, sunflower, rapeseed and other plant oils have been marketed for years, but they have been slow to catch on because of questions about performance and because they tend to cost more. Suppliers of plant-based lubes say the procurement program will help lower both hurdles. Government purchases should help products gain economies of scale needed to reduce prices. Marketers say it will also give them an opportunity to demonstrate performance to other customers.
Marketers of plant-based lubes said last week that they were still assessing the proposed rule. Some said they saw room to tweak the minimum content levels.
Some of the minimums seem a little bit low, said Chris Donaghy, marketing manager, automotive and industrial lubricants, for Uniqema, citing for example the 50 percent minimum vegetable oil contentfor hydraulic, power steering and transmission fluids. We know we can make things like hydraulic fluids with contents up in the 80s. But details like that certainly arent as significant as the fact that this is a step toward creating more demand for these types of products.