Bio-Lubricants Market

Market Overview

The global bio-lubricants market size was valued at USD 2 billion in 2022 and is projected to reach a value of USD 2.80 billion by 2031, registering a CAGR of 3.80% during the forecast period 2023-2031.

Bio-lubricants are natural products used to lubricate engines; they are mainly used in two-stroke engines, railroad flanges, dust suppressants, cables, marine lubricants, chainsaw bars, and chains. These lubricants are used in applications where the lubricant undergoes total loss (i.e., where the lubricant is either burned or ejected). Bio-lubricants are also used in sensitive environments such as waterways and national parks. Bio-lubricants are biodegradable, renewable, environment-friendly, and economical, reducing pollution.

Bio-lubricants are oil-based lubricants made of either vegetable oil or animal fat. Vegetable oils such as linseed, soybean, rapeseed, canola, palm, and coconut produce bio-lubricants. Lubricants produced using vegetable oil are mainly used in environmentally sensitive areas such as forests, rivers, and mountains. In the case of animal fats, the oil collected as a by-product of the meat packaging industry is used as a lubricant. Animal fat is collected from fats derived from sheep, cattle, and hogs. Animal fat lubricants are used not only in petroleum and metal processing but also in the chemical and pharmaceutical industries. Additives are often added to lubricants to enhance their characteristics.

Due to high viscosity, bio-lubricants can be used in a wide temperature range. They have lower emissions than mineral oils and esters with a wetting tendency, which leads to a decrease in friction and provides an equal or higher tool life. Bio-lubricants also provide safety, better skin compatibility, lesser oil mist, and reduced oil vapor, which means lesser inhalation into the lungs. Bio-lubricants have a high flash point, which prevents them from quickly catching fire.

Market Dynamics

Market Drivers

Government Regulations

Governments are mandating the use of environment-friendly lubricants in places such as forests, aquatic areas, mountains, agricultural lands, and places where mineral-based oil can harm employees. For instance, bio-lubricants introduced in the market must follow biodegradable criteria issued by the OECD (Organisation for Economic Co-operation and Development). Many companies are taking cognizance of the importance of sustainability. The E.U. roughly estimates that 3 million tonnes of oil, including lubricating oil, is wasted each year, leading companies to adopt bio-lubricants to achieve sustainability goals.

Growing Acceptance

The growing acceptance of bio-lubricants by end-use industries is driving the market considerably. High-quality bio-lubricants provide improved efficiency and better durability. Green public policies in the field of construction have also spurred the growth of the bio-hydraulic fluids market. Employee health has also become a significant factor contributing to the increase in the use of bio-lubricants in the metalworking industry, automobile industry, and general manufacturing.

Market Restraints

High Cost

Organic and largely biodegradable lubricants made of vegetable oil offer a potential substitute for traditional lubricants. However, their low oxidative properties, thermal and hydrolytic stability, poor low-temperature properties, and wide range of accessible viscosities limit their direct use as base oils. These downsides can be reduced through appropriate chemical modifications, formulations with antioxidants, and combinations with mineral oils. However, they play a part in rising expenses, pollution, and declining biodegradability. Producing cost-effective bio-based lubricants with a novel synergy of high lubricating characteristics and biodegradability is a significant problem. 

One major obstacle is the price of these bio-lubricants. A bio-based lubricant will cost you between $30 and $4 more than a conventional lubricant. Most bio-based products are priced to be competitive with mid to high-performance mineral oil products. Higher-priced goods can also be justified for use in numerous applications where biodegradability, lubricity, viscosity, and fire protection are particularly important.

Market Opportunity

Green Planet Trends

From sustainable lubrication to green construction, there are chances for sustainable solutions. A bio lubricant is a non-toxic substance that is renewable by nature, quickly biodegrades (by at least 60% in 28 days), and contains at least 25% carbon from bio-sourced sources.

Alternatives to traditional lubricating oils that harm the environment by releasing toxic vapors include bio-based lubricant alternatives. The industry is rapidly expanding among environmental activists due to its unique "environmental benignity."

In recent years, bio-based lubricating oils have advanced significantly across various applications that aim to benefit from their unique and superior qualities, such as biodegradability, lower flammability, toxicity, and volatility.

Regional Analysis

Depending on the region, the market is analyzed in North America, Asia-Pacific, Europe, and LAMEA. North America dominates the market.

North America held the largest bio-lubricants market share and is anticipated to keep that position throughout the forecast period. Along with the increased regulatory intervention by the U.S. government regarding the use of conventional lubricants, a rejuvenated automobile industry in the U.S. and Canada is anticipated to drive the global market. The U.S. Air Force also promotes plant-derived biodegradable products as a strategic and fundamental approach to national security, which is another market-guiding factor. Government spending on bio-lubricants in the maritime and automotive industries is expected to increase, opening up attractive market potential. The implementation of the Vessel General Permit (VGP) in 2013 by the U.S. Environmental Protection Agency compelled vessels flying in and around the U.S. to use environment-friendly lubricants in oil-to-sea interfaces, which are non-toxic and non-bio-accumulative. This increased the use of bio-lubricants and created awareness, prompting the International Maritime Organization (IMO) to use environment-friendly lubricants in the Polar region from January 2017.

Europe

The use of bio-based chemicals in Europe is encouraged by strict legislation and the ongoing shift toward a bio-economy in Germany, Italy, the Nordic, Benelux, and France. The European Union's Ecolabel, Sweden's SS 155434, and Germany's Blue Angel scheme have all made policies regarding hydraulic fluids and greases. In contrast, the Nordic Swan developed by Denmark, Norway, Iceland, Sweden, and Finland has strict biodegradability, toxicity, technical performance, and renewability criteria. In Italy, there are additional taxes if mineral-based oil is used.

Asia-Pacific

China is rapidly increasing its wind power capacity. The Gansu wind farm project under construction is expected to reach 20,000 MW potential by 2020, which aligns with its aim to reach 250 GW of wind power. This strongly indicates bio-lubricants market growth, as wind turbines need lubrication.

LAMEA

LAMEA is still more relaxed than developed economies in terms of sustainability. In the coming years, environmental concerns will see these economies enforcing more regulations, positively influencing the bio-lubricants market.

Segmental Analysis

For better understanding, the market is segmented By Base Oil Type, Application, End- Use, and Region.

Based on oil type, it is further bifurcated into vegetable oil and animal fats.

• Vegetable Oil

Due to their excellent lubricity, biodegradability, viscosity-temperature characteristics, and low volatility, vegetable oils are promising candidates as the base fluid for eco-friendly lubricants.

Based on application, it is sub-segmented into Chainsaw oils and hydraulic fluids.

• Animal Fats

This comprises chicken fat, pork lard, and cattle tallow. Because they are much less expensive than vegetable oils, animal fats are desirable feedstocks for biodiesel.

Based on Application, it is sub-segmented into Chainsaw Oils and Hydraulic Fluids, where hydraulic fluids dominate the market.

• Hydraulic Fluids

The largest market share belonged to the hydraulic fluids category. Bio-based lubricants are frequently utilized as hydraulic fluids to enhance operations such as harvesters, cranes, tractors, or load carriers in forests. Many producers of bio-based lubricants are aware of this market opportunity. They have goods that reflect the region's most susceptible to spills and applications lost in use, or they are designing such products.

• Chainsaw Oils

Bar and chain oil is another lost-in-use application that necessitates further lubrication of chainsaw bars and chains. Given that most chainsaws are used outside and mainly in environmentally sensitive regions like woods and farmland, this is a small but potentially lucrative market. Bio-based lubricants are used to lubricate chainsaws. Oil is spread across the forest floor during the instrument's operation and subjected to a centrifugal force.

Based on End-use, it is sub-segmented into Industrial, Commercial Transport, and Passenger Vehicles, where Commercial transportation dominates the market.

• Commercial Transportation

 The automotive and other transportation segments held the lion's share of the market in terms of volume. Maximizing the energy efficiency, performance, longevity, and environmental friendliness of lubricant materials is of significant concern to the automotive and equipment industries. Other-based lubricants are prospective replacement lubricants in the automobile sector due to their low toxicity, solid lubricating qualities, and high viscosity index.

Recent Developments

• In November 2022, Shell concluded selling its stake in Malampaya, Philippines.
• In October 2022, Shell was chosen as a partner in the North Field South LNG project.
• In November 2022, Regional carbon capture and storage projects in Indonesia are advanced by ExxonMobil and Pertamina.
• In November 2022, On Angola Block 15, ExxonMobil and partners made a discovery.
• In October 2022, ExxonMobil reported two discoveries in Guyana.
• In July 2022, the massive deep-water project offshore of India by B.P. and Reliance is almost finished.
• In November 2022, PANOLIN signed a contract with Shell to sell the ECL business.