Base Stocks

Base Oil Report: Trends


Base Oil Report: Trends
© Lotus_studio; Hekla

Is PAO Set to Grow?

Sustainability is no longer just a buzzword thrown around in marketing material in an attempt to increase sales or attract investors. Instead, it has elevated to a dire necessity, with various types of companies from around the globe taking real action to implement more sustainable practices in their daily operations while also producing products that are themselves more sustainable.

Once considered an industry that could never be sustainable because of its use of crude oil and other fossil fuels, the lubricants and base oils industry has begun to prove the naysayers wrong. 

How is it doing this? The answer is manyfold but perhaps begins with a reconsideration of lubricant components.  

The lubricants industry is continuously working to come up with formulations that sufficiently protect vital equipment while also increasing efficiency. Because base oil generally comprises 75% or more of a finished lubricant’s formulation, it is reasonable that formulators would rely on base stock selection to increase the sustainability profile of the finished product. (Turn to Page 37 to learn more about how base stock selection influences sustainability.)

Cue polyalphaolefin, which is a Group IV synthetic base stock that offers such performance benefits as low volatility, good oxidative stability and the ability to withstand extreme hot and cold temperatures. PAO can be used to formulate engine oils and other types of lubricants with longer drain intervals than those formulated with mineral oils. It can also contribute to increased fuel economy and adherence to increasingly stringent emissions standards. 

Growth Opportunities for PAO 

While API Group III and III+ base stocks have tempered the use of PAO in engine oils because of their greater availability and more attractive price point, consultancy Kline & Co. believes that demand for PAO is set to increase in the coming years. 

What factors might contribute to PAO growth? 

Kline posited that the ever-tightening standards of original equipment manufacturers will require lubricants to be formulated with at least some portion of PAO. “Globally, the OEM segment for finished lubricants is growing, which directly drives the market demand for high-performance base stocks, including PAOs,” the consultancy wrote in a July 2022 report. 

Viscosity requirements may also drive the growth of PAO, Kline said. Engine oil viscosity has been gradually decreasing for years, and this trend is expected to continue as fuel economy requirements and emissions standards become stricter. PAO is available in very low viscosities, making it a top contender for use in 0W-16 and 0W-12 engine oils. 

PAO is a good choice for applications on the other end of the viscosity spectrum, too. Because Group IV base stocks are available in very high viscosities as well, they are ideal for use in such industrial applications as gear oils for wind turbines and greases. 

By now it should come as no surprise that the future of the global car parc is electric. Of course, the rate of adoption of electric vehicles will vary by region, but most industry players agree that the internal combustion engine will be phased out in the coming decades.

This evolution of the car parc has already begun to create growth opportunities for PAO. While electric vehicles do not require engine oils, they cannot operate without other types of fluids, including greases, thermal management fluids and transmission fluids. PAOs are well suited for use in these types of EV lubricants because they demonstrate good thermal conductivity. Group IV base stocks also possess good dielectric properties, a lower friction coefficient and decreased torque loss. 

PAOs’ thermal properties make them valuable in applications outside of EVs as well.  “This application offers growth avenues beyond EVs, as demand for coolants is likely to grow alongside the growth of immersion cooling requirements in data centers worldwide,” Kline’s report said. 

Perhaps the most promising growth opportunity, however, will come from the uptick in demand for clean energy, particularly from green hydrogen. Increasing green hydrogen capacity will require renewable energy sources—generally wind or solar—to power electrolyzers. 

How will PAO demand be affected by this shift? 

“As wind energy capacity grows to aid green hydrogen production, it will create new demand for PAOs, since they are highly favored in that application,” Kline’s report predicted. “However, wind energy will compete against solar energy and may not be preferred in some markets.”

According to Kline, all of the world’s major countries have green hydrogen policies in place or are in the process of developing them. 

Ready, Set, Grow

Several of the world’s top producers of PAO appear to be bracing for a looming increase in demand by increasing their production capacity of the synthetic base stock. For instance, Chevron Phillips announced in June that it has plans to build a new PAO unit in Beringen, Belgium. The addition is expected to boost the company’s production in the country to 120,000 metric tons per year. 

Similarly, ExxonMobil announced in October last year that it has plans to expand the production capacity of its metallocene high-viscosity PAO plant in Baytown, Texas, by 20%, while INEOS has started production at its plant at Chocolate Bayou.  

Sydney Moore is managing editor of Lubes’n’Greases magazine. Contact her at