The global biodegradable engine oil market size was valued at USD 914 million in 2021, presumed to reach USD 1,310 million, expanding at a CAGR of 4.6% during the forecast period. Biodegradation is a process that changes or degrades substances that enter the environment. Environmental microorganisms (or their enzymes) carry out the biodegradation process, like bacteria, yeast, protozoa, and fungi. The process results in carbon dioxide and water emissions into the surrounding environment. Biodegradable lubricants have the potential to outperform mineral oils substantially. Using biodegradable materials such as vegetable oil, biodegradable engine oil is manufactured. Vegetable oils are non-toxic, biodegradable, and a renewable source of cooking oil that can help lessen the reliance on imported petroleum oils. Manufacturers of biodegradable engine oil focus on bioaccumulation and ecotoxicity to reduce the adverse environmental effects of engine oil.
An increase in the use of high-performance lubricants, demand from the expanding wind energy industry, and the expansion of the global cold chain market are the primary factors driving the market for biodegradable engine oil. In addition, the rising supply of high-performance, cost-competitive green base oils fuels the industry in the context of government legislation driving such products. Bio-lubricants' manufacturing continues to rely primarily on the availability of vegetable and animal oils that are byproducts of other industrial processes. Complex processing technologies can enhance the production's initial cost, which may hinder its expansion throughout the anticipated term. Over the projection period, however, a rise in the popularity of bio-lubricants and industrial developments in the Middle East and Africa area is expected to present opportunities.
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The Growing Automotive Sector and Industrialization in Developing Economies
Vehicle production and sales have increased significantly in the automotive sector. According to information provided by the Organization Internationale des Constructeurs d'Automobiles, the annual global production of automobiles was roughly 97 million in 2017. The automobile sector is currently through a period of tremendous expansion in Asia-Pacific and North America, among other regions, and annual car sales have increased dramatically. The growth of the automobile sectors in the Asia Pacific and North America has been propelled by technical developments.
Demographic development in nations like Brazil and Russia would shortly contribute to the automotive sector's expansion. Considered a positive contributor to the demand for biodegradable oils, a rise in vehicle production is a significant driver of this demand. Moreover, growing sales of commercial and passenger cars are propelling the global automotive industry, particularly in emerging nations such as Asia Pacific, Africa, and South America. This is further anticipated to boost the biodegradable engine oil market.
Recent years have also seen an increase in the need for biodegradable oils due to Asia Pacific's tremendous industrial boom, which is anticipated to continue. Domestic and foreign investment in essential sectors such as oil, manufacturing, construction, and mining has increased substantially during the past decade. China, home to about 20% of the world's population, has reported increased demand for biodegradable oils. In the past decade, India's GDP growth has been moderate. Numerous investments have been made in vital industries, including construction, cement, steel, and oil. The government is encouraging the growth of India's manufacturing sector by liberalizing rules and granting additional incentives. Thus, propelling the biodegradable engine oil market.
The Cost of Biodegradable Oil
The high cost of biodegradable oils is affecting the demand for the product. Typically, the price of biodegradable oils exceeds that of mineral oils. This hinders the shift of smaller businesses to lubricants that are better for the environment. The price includes the oils and ensures that all equipment is thoroughly cleaned before the transfer, as most vegetable and mineral oils do not mix. Changing to biodegradable oils might be costly due to the production time required. However, most plants prefer to avoid incurring more expenditures and downtime unless it is essential and a financial reason can be provided.
Increased Consumption of Vegetable Oil
Various types of lubricants are available worldwide, including mineral oils, synthetic oils, refined oils, and vegetable oils. Most lubricants on the market are composed of mineral oil obtained from petroleum oil, which is incompatible with the environment due to its toxicity and inability to biodegrade. Concerns over petroleum-derived lubricants arose due to the lack of information regarding petroleum reserves and the rise in petroleum consumption. This led to the discovery of alternative lubricants to fulfill future demand. Vegetable oil can also play a significant part in replacing petroleum lubricants, as it has various advantages over base lubricants, including renewability, eco-friendliness, biodegradability, and lower toxicity. This creates lucrative growth opportunities for the biodegradable engine oil market to expand.
The global biodegradable engine oil market is classified based on type, application, and region.
Based on type, the categories are Vegetable Oils, Polyalkylene Glycols, Synthetic Esters, and Others.
The vegetable oil section is envisioned to grow at a CAGR of 4.8% and hold the largest market share. The structural similarity of plant-based oils to mineral oils' long-chained hydrocarbons makes them a promising alternative to traditional mineral oils. Due to their advantageous qualities, like renewability, non-toxicity, and economic and environmental friendliness, these oils are increasingly used to produce biodegradable motor oil. The dominant market position of vegetable oil can be due to its high biodegradability, low toxicity, and high lubricity. The segment's expansion can also be linked to the wide availability of vegetable oil seeds utilized as inputs. Moreover, vegetable oils have more potential as lubricants than mineral oils due to their high flash point, high viscosity index, high lubricity, and low evaporation loss.
The synthetic esters section will hold the second-largest share. Synthetic ester lubricants are utilized in engine oils to lengthen drain intervals and provide superior film safety. These lubricants have developed as a cost-effective alternative for lowering malfunctions and extending drain cycles, resulting in increased market penetration. Product development has grown in response to increased demand from the automotive and aerospace industries for fuel-efficient and optimal engines. In addition, an increase in demand from heavy machinery producers due to its capacity to endure high temperatures will significantly drive market expansion throughout the forecast period. The increasing demand for eco-friendly products significantly contributes to the overall market development.
Based on application, the categories include Agriculture, Transportation, Construction, and Others.
The transportation section is envisioned to expand at a CAGR of 4.7% and hold the largest market share. Automotive oils reduce friction between two car part surfaces and demonstrate prospective technology capable of providing durable surfaces, maximizing overall performance while adhering to environmental regulations. Increasing mobility due to urbanization, rising per capita income, rising expectations of owning a vehicle, and demand for goods carriers from small and medium-sized businesses are anticipated to result in a significant increase in engine oil consumption. This tendency is predicted to complement the industry's expansion over the forecast period. In addition, properties such as superior thermal stability, a low freezing point, and a high boiling point contribute to the engine's enhanced overall performance.
The construction section will hold the second-largest share. A lubricant is a chemical substance used to enhance the productivity of machinery for the efficient operation of both small and large machines. To prevent breakdowns and site shutdowns, the building and construction sector employs a variety of devices requiring advanced lubrication. Due to primary causes such as urbanization and the global economic recovery, the global construction sector is positioned for significant expansion over the next several years. This exponential rise in the worldwide construction industry is anticipated to increase the use of construction lubricants. Increasing emphasis on infrastructure development in established and emerging nations is providing profitable avenues for producers of construction equipment, creating future growth potential for key players in the construction lubricants market.
The region-wise segmentation of the global biodegradable engine oil market includes North America, Europe, Asia-Pacific, and LAMEA.
Europe and North America will Dominate the Regional Market
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Europe will command the market with the largest share while growing at a CAGR of 4.2%. As a result of regulations supporting the use of biodegradable esters in various applications, such as compressor oils, engine oils, and metalworking fluids, Europe's consumption of synthetic ester lubricants is anticipated to increase at a rapid rate. European Commission eco-labels provide standard requirements for bio-lubricants, and tight laws promoting the use of bio-lubricants in Europe are expected to fuel stable demand growth over the projection period. Under the European Eco Mark Regulations, biobased lubricants are now listed. The bio-based lubricants segment is predicted to be bolstered by OEM manufacturers' increased desire for bio-based ecological products and severe regulatory changes regarding environmental concerns. Global expansion of the biodegradable engine oil market is driven by government restrictions, improved availability of high-performance oils, and cost-competitive green base oils.
North America will expand at a CAGR of 4.7% and hold USD 429 million. Automotive and industrial applications form the most significant part of the lubricants market in the United States. The increasing need for industrial lubricants in the United States can be attributed to the increased manufacturing of chemicals, food, and electronics. North American demand for synthetic ester lubricants is anticipated to be driven by the expansion of the aerospace and automobile industries. The involvement of large aircraft corporations, such as Boeing, has increased engine oil application requirements. In addition, the increasing use of bio-lubricants in the transportation and manufacturing industries is anticipated to result in a significant increase in global demand for biodegradable engine oil over the projection period.
Increasing automobile production in the U.S. and Mexico, along with an increase in the number of automakers establishing bases in Mexico, is anticipated to boost automotive maintenance consumption. In addition, the major oil refining businesses in the conventional lubricant industry provide biodegradable engine oil for marine applications. Aside from these corporations, most suppliers are tiny businesses whose primary focus is the research and development of bio-lubricants. It is anticipated that the quantity of feedstock, such as soybeans in the United States and rapeseed in Canada, will assist the North American market. The increasing demand for lubricants with superior product qualities, such as constant viscosity, high flash points, biodegradability, and reduced emission levels, is positively influencing the growth of their industrial uses.