Biolubricants: A North American and European Market Report
San Jose, California (PRWEB) March 13, 2012
Follow us on LinkedIn – Biolubricants include lubricants with biodegradable properties and which are non-toxic for human as well as aquatic environments. Biolubricants can be produced from vegetable oil or synthetic esters produced from modified renewal oils or mineral oil-based products. The industry has been gaining in significance supported by research studies that indicate that use of biolubricants can reduce emission of greenhouse gases by more than half, and also reduce two-thirds of energy consumption as compared to petroleum-derived lubricants. Coupled with the fact that 30% of conventional lubes accumulate in the environment as residual wastes, biolubricants are gradually replacing non-biodegradable fossil-based lubricants. Conventional lubricants such as hydraulic oils, machinery oils and industrial oils are discharged into water bodies such as seas, rivers every year. This results in groundwater pollution which in turn adversely affects growth of plantation and other natural vegetation. Industrial applications of biolubricants are still in nascent stage with tremendous scope for expansion.
Developed economies like North America and Europe are spearheading innovation in utilizing renewable energy sources as replacement for fossil fuels, given that the focus on immediate intervention in addressing climate change is stronger in these countries. Also, government forces driving bio-based alternatives are higher in these countries. Utilized in a wide range of applications, demand for lubricating oils has and will continue to be strong, especially in highly industrialized and motorized regions like Western Europe and North America. Under such a scenario, growing demand for environmentally-compatible lubricants bodes well for the future of bio-lubricants.
The European debt crisis is posing some systemic concerns for the biolubricants market. The impact of a possible euro zone recession on the base oils & lubricants industry can trickle down into the biolubricants industry, largely in the form of erosion in customers’ buying confidence which will acutely impact premium priced products. Biolubricants, on an average, is more expensive than classical/standard lubricants. With primary applications of biolubricants centering on industrial/agricultural machinery and automobiles, demand/consumption patterns remains sensitive to manufacturing/engineering activities and industrial production. EUs industrial sentiment currently vacillates between hope and concerns. Manufacturing production which continued to recover from 2010 through 2011 is expected to continue into the year 2012. For instance, in Germany industrial/manufacturing output is holding well as indicated by the country’s yet strong export market, a key reason for the country’s superior handling of its debt crisis in comparison with Greece, Portugal, Spain and Italy. Immediate hurdles, such as, credit restriction, consumer indecisiveness, fears of slowing vehicle sales, high labor costs, is however making the automobile industry nervous over the play out of the sovereign debt crisis drama.
Amidst the ongoing political wrangling over debt ceiling in the debt ridden European economies, the financial future remains largely uncertain thus fuelling concerns over the continued availability of government and private funds for small and medium enterprises (SMEs) engaged in developing innovative new biolubricants. Given the yet evolving and developing nature of the biolubricants industry continuous injection of funds is a necessity in developing production processes, innovating newer methods for raw materials refining and product formulation, and research in evaluating the efficiency of newer processes with traditional petrochemical bases. Transition towards commercialization therefore requires ample flow of funds. This thereby makes the industry capital intensive and dependent on the financial health of the broader economy, which in turn dictates the government’s willingness to support and subsidize capital intensive industries.
Bearish market sentiments indicate that an escalation in the euro crisis and possible adoption of austerity measures could push up the cost of capital, impacting players in the biolubricants industry. However, not all is alarmist thinking, despite the overshadowing concerns, guarded optimism prevails over the financial bailout strategies designed to restore market confidence. Germany’s relative resilience in handling the euro zone crisis is helping strengthen confidence levels. Market participants additionally remain bullish and secure in the belief that despite the credit rationing expected to be adopted by governments to balance their countries’ debt to GDP growth ratios, capital will continue to be funneled towards technology intensive, green & environmentally friendly products/services at the expense of traditional industries/manufacturers.
As stated by the new market research report on Biolubricants, North America is the fastest growing market for lubricants with a projected CAGR of 7.1% over the analysis period. Future growth in the industry will depend upon the development of new bases and additives and successful eco-labeling of the materials and creation of a sophisticated supply chain for the same. In addition, breakthroughs in the use of vegetable oil byproducts in biolubricant production can help bring down costs of production helping the industry to compete more favorably with traditional lubricants. By product type, soybean-based lubricants are expected to witness growth on account of factors such as environmental benefits, performance-based advantages and favorable cost-benefit matrix. As an emerging form of raw material in producing biodegradable lubricants, soybean will face tough competition from other types of vegetable oils as well as synthetic lubricants. Also rising in popularity is biodegradable palm-oil based fluids in formulating lubricants. Palm oil can be suitably used as a lubricant due to characteristics such as modest thermal-oxidative stability and the ability to remain fluid during cold temperatures.
Major players in the marketplace include BP Plc, BP Lubricants USA, Inc., Chevron Corporation, Cargill, Incorporated, ExxonMobil Corporation, Esso S.A.F, Eurol BV, Fuchs Petrolub AG, Miller Oils Ltd., Falcon Lubricants Ltd., Neatsfoot Oil Refineries Corporation, Panolin AG, Renewable Lubricants Inc., Suncor Energy Inc., Statoil Lubricants, Total S.A., Valvoline and Welch Holme & Clark Co Inc., among others.
The research report titled “Biolubricants: A North American and European Market Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of industry overview, market drivers, trends & issues, product analysis, regulatory environment, product innovations, recent industry activity and profiles of market players worldwide. Market estimates and projections are provided both in volume (tonnes) and value (US$) for North America and Europe. Market analytics for the North American market are provided for product segments including Bio 2 Cycle Engine Oils, Chainsaw Oil, Concrete Release Agents, Gear Oils, Greases, Hydraulic Fluids and Metal Working Fluids. Product segments analyzed for the European market include Chainsaw Oils, Concrete Release Agent, Hydraulic Fluids, and Niche Oils (Cutting Oils, Greases, Two-stroke Engine Oils and Others).
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