The biolubricants market is a tiny portion of the overall lubricants market, but it is growing at a rate that is faster than the overall market, he said. As you would expect, Europe and the Americas are the main regions accounting for 85 to 90 percent of this total [biolubricants] number, and Asia and the rest of the world account for the balance.

Among countries covered in the study, the biolubricant penetration was highest in Denmark, Finland, Iceland, Norway, Sweden, Germany and Brazil. Phadke noted that in European countries, various agencies that have oversight of dams, waterways and rivers are increasingly being convinced to change over to biolubricants, which helps create a base level of demand. Such penetration was lowest in markets such as the United States, South Korea and Japan.

Driving Adoption

Kline concluded that the main driver for biolubricants is the increase in the supply of high-performing, cost-competitive, renewably sourced base oils – in the context of government regulation and standards – supported by industry interest to develop biolubricant formulations for various end users. The company expects biolubricants to continue replacing conventional lubricants through ongoing product development and wider distribution. Gear oil is one example, driven by growth in wind turbines – specifically off-shore and in Germany, Denmark and Spain. Another is transformer oil, where Norway is a key existing market, and others could emerge.

Klines study attributed the relatively limited uptake of biolubricants to lack of regulation and domestic labels, lack of high-performing formulations that are on par with conventional lubricants, high price and lack of suitable additives.

Phadke noted that one of the biggest challenges in analyzing the market is defining what constitutes a biolubricant. There are many companies, regulatory bodies, marketing people and other entities operating in this industry – all of these companies have essentially appropriated the bio label for their use, he noted. The understanding each brings to defining a biolubricant is quite different. In many cases, its in conflict with how other companies understand what the bio label means, he said.

Kline has noticed some common themes among countries that have a higher penetration of biolubricants. We can see that government and industry standards definitely help in sparking the demand, Phadke said. Increased awareness of the environment among the general public, which then translates into different industry participants and trade classes being more proactive, helps generate demand.

Government support in the form of public procurement directives is another key factor in creating demand for biolubricants. He cited the example of Sweden, where the forestry association is very particular about using biolubricants, which creates demand in that country.

Barriers to wider adoption of biolubricants result from existing infrastructure, he said. For example, elastomer seals, storage tanks and flushing requirements can prove barriers to biolubricant conversions in some applications, such as passenger cars, where original equipment manufacturers may need to adjust engines to accommodate a biolubricant. Pricing can prove another barrier, Kline noted in its findings, with finished biolubricant prices varying according to factors such as the product adoption curve, base oil raw material price and transportation costs.

According to Kline, Panolin and Fuchs are the leading suppliers of finished biolubricants worldwide. Cargill has a significant position in transformer oils. Klines study noted that the presence of other market players depends on their region of origin and established distribution networks. Statoil is a leader in the Nordic countries, Quaker Chemical in Brazil, and Kajo Schmierstoffe is a leading supplier for private-label lubricants.

Phadke noted that the leading market players established themselves through access to unique formulations, specific regional or industry regulations or the aftermarket of green OEMs. Examples include dielectric fluids (Cargill), metalworking fluids (Houghton), marine (Vickers), railroad (Bechem), tunnel-driving (Condat) and mountain equipment (York).

Country Focus

The consultancy focused specifically on 15 countries globally that were considered interesting because of current biolubricant market penetration or the potential for future growth. The study covered 10 markets in Europe, including France, Germany, Belgium, Luxembourg, the Netherlands, Sweden, Denmark, Norway and Finland. The Americas markets covered included the United States and Brazil.

In Asia, Klines study focused on Japan and South Korea because those markets have had ecolabels for a long time, and the company sought to measure the impact of that type of label on the market. The study also covered China, to determine what the growth potential might be there. Kline found that markets in Asia continue to mirror European regulation, including green labels and public procurement policies.

To help frame the analysis and give clarity to the topic, Kline considered three criteria: biodegradability, biosourced content and toxicity. Any product that fulfills any one of these criteria can essentially be considered a biolubricant, Phadke said.

Biodegradability refers to lubricants that biodegrade by 60 percent or more in 28 days. Such products are considered readily biodegradable. Biodegradability is measured through tests from organizations such as the OECD (Organization for Economic Cooperation and Development), ASTM and ISO.

Biosourced refers to lubricants with biobased carbon in excess of 25 percent, as measured by an ASTM test. Examples include rapeseed, soybean, sunflower, palm, tallow, coconut and cellulosic sugar.

Base oils used in biolubricants tend to be nontoxic and biodegradable. Kline found a trend toward chlorine-free, nontoxic and biodegradable additives and dedicated additive packages for green labels.

Pure vegetable oils (natural esters) are considered the base oil of choice for total loss situations such as molding and chainsaw applications, Kline found, or where extreme temperature performance and oxidation stability are less critical. Examples include rapeseed oil in Europe, soybean oils in the Americas for transformer oils, and palm oils in Asia for cold-forming metalworking fluid applications.

The analysis included lubricants that are nontoxic to the environment, which can be measured by OECD or ASTM tests. For the analysis, Kline specifically excluded some nontoxic, biodegradable food grade lubricants that are not biosourced.

Regulations Spur Adoption

Phadke noted the regulatory environment includes a number of programs in Europe. Examples include the European Ecolabel, Germanys Blue Angel and Federal Agency for Renewable Resources, and the Swedish Standard.

The European Ecolabel, adopted by the European Union, is expected to gradually become the green label of choice for biolubricants in Europe, and serve as a reference point for formulators in Asia and the Americas. It is a voluntary scheme, which means that producers, importers and retailers can choose to apply for the label for their qualifying products.

Phadke noted that Blue Angel, the in-country labeling scheme in Germany, provides a common definition and reference point for biolubricants. Developed in 1988, the program has criteria for several classes of lubricants, including hydraulic fluids, lubricating oils and greases.

Although no longer active, Germanys Federal Agency for Renewable Sources operated a market introduction program offering to subsidize the price difference when switching from mineral products to biolubricants in the hydraulic fluid, heavy-duty motor oil, gear oil and grease product categories. Chainsaw fluids and molding fluids were out of scope, he noted.

The Swedish Standard is often adopted by other Nordic countries. Examples include requirements signifying that hydraulic fluids and lubricating greases are biodegradable, with minimal aquatic toxicity.