Compared to mineral oil based hydraulic fluids (where sales are declining), bio-hydraulic fluids are rocketing upwards at a growth rate between 5 percent and 10 percent per year. Bio-hydraulic fluids (BHFs) now make up about 2 to 4 percent of the U.S. market and 3 to 7 percent of the European market.
Based on four market trends – the emergence of EU Eco-Label and renewability; the requirement to operate under more severe conditions; the pressure to reduce costs; and shifting attitudes of consumers – we believe that these fluids will play a significant role in the future.
Upgrading Performance
Some skeptics may still harbor outdated perceptions of BHFs. Early BHFs were simple distillation cuts of unsaturated, relatively unstable vegetable oils. They were, and still are, lower cost and excellent choices where the oil is consumed, discharge to the environment is inevitable, low-temperature properties are not important, and conditions are not severe (e.g., applications such as chain saws, concrete mould release agents, and some agricultural equipment).
The subsequent development of oleates – saponified fluids based on mono-unsaturated long-chain oleic acid – helped improve low-temperature properties, but hydrolytic and oxidative stability still did not meet requirements for higher-end applications.
Unsaturated esters, the next major improvement, dramatically improved all characteristics of bio-fluids: oxidative and hydrolytic stability, low-temperature performance, and seal compatibility. The performance was closer to mineral based fluids, although the cost of use (and a lingering bad reputation) mitigated against wide acceptance.
Todays advanced BHF technology represents a step-change in performance. Based on engineered saturated esters, the new fluids show greatly improved oxidative stability, hydrolytic stability and seal compatibility – to the point where these fluids may rival their mineral based cousins in many performance features. A patent application recently submitted by Cognis for next-generation saturated esters should extend the performance range still further.
One highly desirable feature of the new fluids is that they can be manufactured almost entirely from renewable source materials, which brings us to what we believe will become the global green standard: the European Unions Eco-Label.
The New Green Standard
The EU Eco-Label standard differs from most previous standards (e.g., Germanys Blue Angel, Scandinavias Nordic Swan, Netherlands VAMIL, etc.) in its focus on renewable resources, which makes it a much more comprehensive approach to environmental sustainability. It would be easy to devote an entire article to the Eco-Label standard, but the most salient changes compared to the widely used Blue Angel standard are that Eco-Label:
Prohibits hazardous components such as halogens, heavy metals, and substances listed by OSPAR, Europes convention to protect the North East Atlantic.
Sets more stringent hazard and toxicity standards than the Blue Angel.
Upgrades biodegradability requirements from applying only to base fluids to include all substances, down to 0.1 percent of the product.
Upgrades bioaccumulation requirements. With the Blue Angel, bioaccumulation is considered only if ecotoxicological concerns exist; under EU Eco-Label, all substances must be non-bioaccumulative to 0.1 percent. This is a very difficult standard to meet.
Upgrades the requirement for use of renewable raw materials from having no requirement to a minimum of 50 percent renewable.
Many of the renewable concepts of the EU Eco-Label are similar to the U.S. Farm Bill of 2002, which ordered the Department of Agriculture to establish preferences for the procurement of biobased products and to assist eligible farmers, ranchers and rural small businesses in purchasing renewable energy systems.
The EU Eco-Label is also an outgrowth of previous European national standards, as well as REACH chemical product regulation. The EU Eco-Label was ratified to create a single regulatory standard for all EU member states and to provide accurate guidance to consumers for many manufactured goods and services. Lubricants were added to the standard in 2005.
Although EU Eco-Label is a voluntary standard, we believe it will become increasingly important and perhaps the de facto global standard. There are many areas where bio-fluids are already mandated in Europe, particularly in Germany, France and the Scandinavian countries. Primary among these are applications where the user cannot reasonably capture a fluid leak, such as cranes extending from an offshore platform (where a hose break sends fluid directly to the water) and logging and construction, where a fluid leak may go directly into the ground.
European governments use a mix of incentives to promote bio-fluids, including legal requirements and financial subsidies. This combination of carrot and stick works quite well, and we expect that the bio-fluid market segment will continue to grow rapidly in Europe. Growth of this market segment is difficult to measure, although it is presently approaching 10 percent.
Needed: Performance, Cost
The drive to increase mechanical efficiency continues unabated as a core trend of industry, which means that the performance requirements for hydraulic fluids become ever more demanding. Today, fluids may be expected to operate at pressures up to 5,000 psi with very small sump volumes.
High pressures and small sumps also drive up operating temperatures. In the past, a good hydraulic fluid was only expected to operate within a temperature range of -20 degrees C to 60 C. Increasingly, both original equipment manufacturers and their customers require a fluid operating range that may be as low as -40 C and as high as 80 to 90 C.
Customer demand for extended fluid life and longer drain intervals drives the cost side of the equation for hydraulic fluids, as it does for lubricants in general. In addition users want greater reliability in their hydraulic systems, which means that todays (and tomorrows) hydraulic fluids must be more stable oxidatively and hydrolytically, and they must also be gentler to seals.
One factor that will drive down both purchase and ownership costs is that major OEMs are now setting specs for all purpose BHFs that will be acceptable worldwide in virtually all applications. Eliminating the complexity of manufacturing and managing a supply chain for a raft of different fluids to meet varying geographical and performance requirements will lower costs for everyone – BHF suppliers, OEMs and end users.
Fortunately, todays advanced BHF technology can respond to all of the trends above. It is now possible to design and develop a renewable based BHF with good oxidative and hydrolytic stability, and which also offers a step-change improvement in seal compatibility. Combine these performances with improved cleanliness in hydraulic systems, and we see the factors are in place for longer drain interval potential and lower operating costs.
Paving the Way
We see a sea-change in the attitude of both consumers and commercial interests in their view toward the environment. In the past, the primary concern was toxicity and biodegradability. That concern expanded to include bioaccumulation, and today the focus is on sustainability in general, and renewable resources in particular.
Leading corporations in the United States are far ahead of the government in calling for environmental responsibility. Many publish policies and practices related to sustainability, as well as corporate goals for improving environmental stewardship. As an example of corporate policies in action, more than 30 companies, including Alcoa, BP America, Dow Chemical, DuPont, Ford, General Electric, General Motors, Shell, Siemens, Xerox and others, have joined together as the U.S. Climate Action Partnership (USCAP), calling for a cap-and-trade system to combat climate change.
The American Wind Energy Association has been working with industry leaders since last June to develop the wind industry agenda for the new president and Congress, with the goal of providing 20 percent renewable energy by 2030. This work has resulted in an extension through 2009 of the Production Tax Credit.
European governments offer financial incentives for the use of BHFs (the carrot and stick mentioned above), and military specs in the United States, the EU and Japan include requirements for bio-fluids. The U.S. Department of Defense requires suppliers to consider eco-friendly alternatives that meet the mil spec, although the purchase decision is left to the discretion of the U.S. Army Depot.
Ultimately, we believe that the real push for BHFs will continue from end users around the world. People are showing a growing acceptance and even preference for environmental products and sustainable approaches to life, whether that be hybrid cars, curbside recycling or recycled building materials. Many corporations now require equipment used in projects around waterways to use BHFs purely out of concern for possible environmental contamination.
In summary, we like to think that todays bio-hydraulic fluids are in the position of early space flight, born after a period of rapid innovation. The potential for the technology is not as far away as the moon.
BHFs have a level of technical sophistication that places them in a superior ecological performance position relative to mineral based oils. Todays saturated esters can meet severe operating conditions that previous BHFs could not match, and end users would do well to consider top-tier BHF fluids in light of severe environmental considerations. New manufacturing technologies for BHFs even make it possible to synthesize fluids for specific applications.
It may be that overwhelming industry acceptance is just a shuttle-launch away. We believe that the increasing relevance of the environment should be cause for everyone to consider BHF fluids. Both OEMs and lubricant producers can gain competitive advantage by proactively offering their customers ecologically sound choices.