Panolin International Inc. acknowledged that getting potential customers to use biolubes was like tilting at windmills. And, indeed, it took the company a long time to win over the Paris and London authorities and convince them that the spillage risks to the Thames and Seine from its hydraulic fluids were minimal. But they finally succeeded.

Winning Over Customers

The Madetswil, Switzerland-based lubes producer boasts a thick portfolio of large-scale projects using its hydraulic bio-fluids, including the Sihwa Lake tidal power plant in South Korea (the largest such installation in the world) and the San Roque dam in the Philippines. The company is a pioneer in producing environmentally considerate lubricants (ECL), as its management calls the biolubes it has marketed since the mid-1980s.

Biolubricant demand in Europe gained momentum twenty years later, when the market started to grow. Only a decade ago the share of biolubes was around one percent of the total European lubricants market. In countries like Germany, Sweden, Netherlands and Austria it is now significantly higher and accounts for five to eight percent, according to some estimates. Biolubes are becoming more accepted in North America, some countries in Asia and Australia. LubesnGreases decided to find out more about these industry trends and travelled to Panolins offices near Zurich.

The best ideas for new products come from customers, said Martin Ruch, customer support manager. In the eighties we had a customer called Buehler. Its sand excavators had regular spills in Lake Geneva, leading to many problems with the authorities. They asked us to develop a biodegradable lubricant that might reduce their environmental issues. It was a turning point for us, and we developed a product that was approved by the local authorities.

In the beginning the company evaluated a variety of raw materials for its biolubes. Weve assessed most of them. At the end we made a decision to use saturated synthetic esters. We havent changed since. Saturated synthetic esters offer biodegradability, non-toxicity and extremely good oxidation stability, which allow us to extend the oil drain interval, Ruch observed. He said that the London Eye operator has used Panolins biodegradable hydraulic fluids since the wheel started to spin in 2000 and only now is making the wheels first hydraulic system oil drain after more than 100,000 working hours.

Ruch recalled that 25 years ago, biolubes had major disadvantages. Using biolubes then meant more oil changes than using mineral oils. So we had to fight this bad image of biodegradable lubricants for years. And sometimes we still do.

Even today the market offers rapeseed oil-based unsaturated esters that are not quite suitable for high-performance applications such as auxiliary drives, hydraulic systems or transmissions. Quite costly failures with biolubes based on different technologies that some companies were promoting two or three decades ago are still happening today, Ruch said. The company keeps fighting the bad image of biodegradable lubes, and it has to convince each end user that product performance today exceeds that of products they used in the past.

Product cost is Panolins next concern. We have competitors that offer biolubes at a very low price without field experience. To convince end users that our higher priced products will lower overall cost is sometimes a hard sell. Especially when the economy is down, Ruch said. He added that its quite difficult to convince somebody to buy expensive products with benefits that accrue only after five or ten years of operation.

Environmental Protection

In rating its products, Panolin refers to the Organization for Economic Cooperation and Development 301b standard that specifies how organic chemicals have to behave in nature. Our understanding of ECL is very clear. Lubes should biodegrade at least 60 percent in twenty eight days, said Patrick Lammle, company owner and CEO. They also should have very low or no toxicity. This is what makes an ECL product.

Besides biodegradability and non-toxicity, renewability is a third important criterion for environmentally friendly products. Renewability is a big controversy in the industry, Lammle said. Whether this criterion makes sense or not, we make both renewable and non-renewable products. The bacteria that consume the spilled chemicals dont care where the raw materials come from, and the question of renewability has always been secondary.

The idea behind biolubes is that when spillage happens, less impact on the environment is always better than full-blown pollution. It is the key concept from the very beginning in the early 1980s, when ECLs were introduced to the market, Lammle stressed. The definition hasnt changed since then, as biodegradability and non-toxicity are two things that always go together. There cannot be a biodegradable product with toxic additives, or non-toxic additives with non-biodegradable base oil.

From mobile applications, in the early 2000s, Panolin expanded the use of its biolubes to stationary hydraulic applications, such as the elevators in the Eiffel Tower, and water gates in many hydro-power plants. Todays hydraulic systems and water turbines are very demanding and require sophisticated lubricants to prevent failure. Meanwhile, weve seen steady growth in these applications, Lammle said.

The Regulatory Arena

Today, a few European Union countries have introduced laws governing the use of biolubes. Belgium requires biolubes to be used in all operations taking place near non-navigable waters. France is working on a similar law. In some other EU countries, the use of biolubes is encouraged not by regulations but by commercial eco-label practices. Swedens standard applies to chain oils, mold oils, hydraulic fluids, two-stroke oils, gear oils, metalworking fluids and greases. Germany has a similar Blue Angel eco-label standard for bio-lubes. Most of the EU governments dont say that you must use biolubes everywhere, but to avoid pollution. And a company has to take all measures to prevent it, Lammle said. The interest in biolubes has grown in recent years with more and more pressure from the governments.

Pressure also comes from society. Swiss citizens, in particular, strongly support preservation of the environment. The companies have to adjust to this expectation. And in various countries expectations regarding the environment differ. Poor or developing countries in Asia and Africa express fewer concerns than the mature markets of Europe and North America, Lammle contended, adding that in poorer markets people ask if they need such products when economic development may take priority over environmental protection. On the other hand, in the mature markets of Western Europe and North America the move toward green technology came earlier. Companies there usually go for the new product, Lammle said.

There are examples of large-scale projects requiring biolubes within countries that may not focus on environmental awareness, Ruch said, referring to the tidal power plant in South Korea or the Mt. Saint Michel project. Also more and more companies ask for biolubes for their earth moving and forestry machines, and the most important OEMs approve, recommend and use biolubes for factory fill.

Look to the Future

Panolin keeps figures about volume and product mix confidential. In 2008 we had good sales, but in the following years export volumes went down, Lammle said, noting that sales dropped up to 20 percent in the original equipment manufacturers segment. However, in 2011 volumes recovered to 2008 levels.

The companys biggest market for biolubes is still Europe. Recently, it started to push its products more aggressively in the Middle East, American and Asian markets. The United States and Australian markets are starting to request more and more biolubes, Ruch said. We believe in the future of biolubes. There are countries where these products have just started to sell, and its only the beginning. We also expect the European market to grow further.