The Total Addressable Market (TAM) for Diesel Engine Lubricants was valued at USD 24.17 billion in 2022. It is estimated to reach USD 38.54 billion by 2031, growing at a CAGR of 5.32% during the forecast period (2023–2031). Diesel engine lubricants provide lubrication to the diesel engine, which consists of the engine block, pistons, crankshafts, and valves. Diesel engine lubricants help reduce the friction and heat generated during the engine's operation, as the diesel engine generates more power than the petrol engine. As the piston cycle runs at high speed due to the high energy efficiency of diesel fuel, it is necessary to provide good quality lubricant to avoid malfunctioning the diesel engine vehicle. Diesel engine lubricants keep diesel engine parts lubricated to reduce vehicle friction. It also helps clean and cool the engine and prevent rust and corrosion accumulation.
Diesel engine lubricants are essential for the proper functioning of diesel engine components and the engine's overall performance. Diesel engine lubricants help to keep diesel engines running smoothly by keeping the oil pressure steady, acting as a cooling agent to keep friction heat to a minimum, reducing oxidation, preventing rusting, and keeping the engine's torque high.
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Significant Growth in Power Generation Sector
In recent years, the power generation sector has shown significant growth. Factors such as changing government policies, rapid industrialization, an increasing population leading to an increase in per capita demand, and increased use of renewable energy have boosted the growth of the power generation sector. The power generation sector is vital in supporting the rapidly developing industrial sector. Emerging economies invest in sustainable practices, reduce air, soil, water, and marine plastic pollution, and promote low-carbon transport to strengthen their infrastructure and financial capacity.
It is anticipated that over the next few decades, the use of fossil fuels will decline due to the role that renewable energy plays in power generation. Solar PV and wind are the leading renewable sources of power generation. Factors such as low costs, widespread availability, and supportive policies by various governments are the driving factors for solar and wind power generation. According to the IEA, wind and solar PV capacity is expected to grow three times during the next decade. This significant rise in renewable power generation is projected to meet all electricity demand growth until 2030. All the above factors are projected to increase the demand for diesel engine generators. This increase in diesel engine generators is expected to positively impact the diesel engine lubricant market.
Increasing Demand for Bio-Diesel as Fuel
Biodiesel is a better and more eco-friendly alternative to conventional or fossil-based diesel fuel. The raw materials used for biodiesel production are vegetable oil, animal oil or fats, grease, and waste cooking oil. Biodiesel is designed to be used as a replacement for petroleum diesel fuel and can blend with petroleum diesel fuel in any proportion. The main advantage of biodiesel is that no special modifications are required to the diesel engines for the use of biodiesel. Since diesel engines power most commercial vehicles used in transportation, the transportation industry is one of the biggest consumers of biodiesel.
Biodiesel has lower exhaust emissions compared to petroleum-based diesel fuel. Biodiesel has lower toxicity and is safer compared to conventional diesel fuel. People across the globe are getting aware of the benefits of biodiesel in terms of vehicle performance, safety, and exhaust emission. The increase in biodiesel fuel is projected to increase the demand for diesel engine lubricants.
Pollution Aspects of Diesel Engine
Even though the market for diesel engines is projected to grow steadily, the stringent emission regulations by various governments are expected to affect the demand for diesel engine vehicles. Diesel engines emit environmental pollutants, such as carbon monoxide, hydrocarbons, particulate matter, and nitrogen oxides. These pollutants have an impact on both the environment and human health.
Transportation is one of the significant contributors to environmental pollution and climate change. Vehicle emissions contribute significantly to the number of greenhouse gases in the atmosphere. Experts have concluded that diesel engines emit pollutants that affect human health adversely and cause acid rain, ground-level ozone, and reduced visibility. Many governments around the world have imposed strict emission standards for cars with diesel engines in an effort to prevent this, which has stunted the market's expansion.
Rapid Infrastructure Development
In recent years, rapid industrialization has boosted the rate of infrastructure development across the globe. Industry 4.0 has digitalized the infrastructure sector, which has changed the pace of infrastructure development. Infrastructure development is essential for global economic growth, and adequate road and railway transport systems, ports, power, and airports are needed to integrate global economies. A country's infrastructure development increases the productivity of the manufacturing sector, as a developed infrastructure ensures easy movement of raw materials and finished goods.
In addition, developed infrastructure creates a positive environment for investors to invest, increasing the market size. The things we've discussed above help a country's economy grow, which is good for the country's overall growth. Heavy industrial equipment is in high demand due to recent infrastructure development. Generally, "heavy industrial equipment" refers to heavy-duty vehicles used for construction and mining work, as heavy industrial equipment needs a diesel engine to carry out heavy construction operations. Therefore, an increase in heavy industrial equipment will increase the demand for diesel engine lubricants.
The global diesel engine lubricants market is segmented by end-users and oil type.
By end-users, the global diesel engine lubricants market is divided into automotive and transport, power generation, heavy industry, and others.
The automotive and transport segment is the highest contributor to the market and is anticipated to grow at a CAGR of 6.26% over the forecast period. Different modes of transportation use diesel engines, which offer better performance and fuel efficiency, and diesel engine lubricants. The transportation sector is essential for the economic growth of a country. The increase in the population has increased the demand for transportation, as people are using transportation regularly to go from one place to another, positively affecting the demand for diesel engine lubricants.
In addition, infrastructure in emerging economies is developing rapidly, which has also increased the demand for the transportation sector by transporting heavy materials used in construction, industrial machinery, and equipment used in industry. Diesel engine vehicles are preferred to transport these heavy goods a significant distance as they offer better fuel efficiency and a high load-carrying capacity. Therefore, the demand for diesel engine lubricants is expected to grow.
Heavy industrial vehicles are used to carry out various operations for the construction and agricultural industries. Diesel engines power most heavy industrial vehicles as they deliver more power output. This high-power output is required for multiple operations carried out by the construction and agriculture industries. Heavy industrial vehicles carry out operations that require high load-carrying capacity, and diesel engines are best suited for the same. In addition, heavy industrial vehicles run for long hours and operate in dusty regions, which puts extreme pressure on the engine and generates a tremendous amount of heat compared to standard vehicles. Therefore, high-quality diesel engine lubricants are required, which can be sustained in different operating conditions and extreme temperatures and reduce the formation of sludge and wax. However, frequent lubricant changes are required to ensure the smooth operation of heavy industrial equipment.
By oil type, the global diesel engine lubricants market is divided into synthetic oil and mineral oil.
The synthetic oil segment owns the highest market share and is anticipated to grow at a CAGR of 6.27% over the forecast period. Synthetic diesel engine lubricants are derived from 100% synthetic base stocks and premium quality additives, which offer higher performance levels that will improve the fuel efficiency of diesel engines. Synthetic diesel engine lubricants are chemical compounds artificially modified by mixing many synthetic components. In addition, various governments are forcing stringent emission regulations on the automotive and manufacturing industries. In order to fulfill these emission regulations, lubricant manufacturers are developing synthetic oil-based products, as these synthetic oils emit fewer greenhouse gases than mineral oil products.
Mineral oil processing includes extraction, crystallization, acid treatment, hydrogenation, and hydrotreating. Mineral-based diesel engine lubricants are used in heavy vehicles used in the construction, transportation, and agriculture industries. The cost of mineral oil is low compared with synthetic oil. Therefore, the demand for mineral oil-based lubricants is higher in the regions where the purchasing power of the customers is low.
Mineral oil has dominated the global diesel engine lubricant market as it is available at a low cost and can be mixed with many additives. But in recent years, the dominance of mineral oil in diesel engine lubricants has been declining due to rapid development in the automotive, power generation, and heavy industrial industries, which have developed modern diesel engines. In addition, developed countries such as the US, Germany, and Japan are concerned about the environmental impact of the growth of the automotive industry.
By region, the global diesel engine lubricants market is divided into North America, Europe, Asia-Pacific, and LAMEA.
Asia-Pacific Dominates the Global Market
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Asia-Pacific is the most significant shareholder in the global diesel engine lubricants market and is anticipated to grow at a CAGR of 6.06% during the forecast period. Asia-Pacific is one of the largest markets for diesel engine lubricants, as the automotive, transportation, power generation, and heavy industrial sectors in this region are increasing significantly due to continuous industrialization and infrastructure development. In addition, low-cost labor and the significant availability of raw materials in the region have fueled the demand for various industries in the Asia-Pacific. Asia Pacific is home to various developing countries, such as India, China, South Korea, and Indonesia. The governments of these developing countries have come up with policies that will attract foreign investment to promote industrial development.
In addition, governments have offered subsidies and incentives under FDI policies. Infrastructure development in the Asia-Pacific is accelerating as governments announce significant infrastructure projects. This infrastructural and industrial development is contributing significantly to the transportation industry. An increase in the transportation industry is expected to develop the diesel engine lubricant market.
North America is expected to grow at a CAGR of 5.58% over the forecast period. Over the past few decades, various industries have witnessed a significant shift due to rapid development in infrastructure and large capital investment in the OEM sector. The oil and gas industry is a significant contributor to economic development in North America as it is the largest crude oil manufacturer in the world. In addition, according to the OICA, North America is the world's second-largest manufacturer of automotive vehicles, accounting for 21% of total automotive vehicle production in 2021. The North American region is home to many automotive lubricant manufacturers due to the high production and processing of oil and gas. Companies such as ExxonMobil, Valvoline, and Petro Canada, have headquarters in the North American region. The US and Canada contributed to North America's high demand for diesel engine lubricants.
Europe is expected to grow significantly over the forecast period. Europe developed countries, such as the UK, France, Italy, Spain, and Germany, are situated in Europe. Therefore, the developed infrastructure and stable economy promote industrial development. In addition, the industrial revolution boosted Europe's economy, which has developed Europe enormously in terms of standards of living, per capita income, advances in production, and the adoption of new technology. The abovementioned factors are the main reasons for the world-class development of the automotive, construction, agriculture, and transportation industries that drive the demand for diesel engine lubricants. Furthermore, the European Environment Agency (EEA) has regulated greenhouse gas emissions to promote sustainable development in the agriculture industry. It includes vehicles and equipment used in the agricultural sector, such as tractors, cultivators, and harvesters that run on IC diesel engines and transmission assemblies, meaning that the demand for good-quality diesel engine lubricants has increased.
The diesel engine vehicle market in LAMEA is growing steadily. Therefore, the diesel engine lubricant market is expected to show slow but steady growth in these regions. Latin America and the Middle East and Africa have more underdeveloped economies than developing economies, which affects the growth of automotive, transportation, power generation, and heavy industrial sectors, leading to slow growth in the diesel engine lubricants market. According to the World Bank Group, in 2021, the agriculture sector in Latin America accounted for 6.5% of the total GDP. In contrast, the Middle East and Africa contributed 13% of the global GDP, according to the International Food Policy Research Institute (IFPRI). This contribution will suit the demand for diesel engine lubricants and heavy industrial equipment used in agriculture.
The key players in the global diesel engine lubricants market are Castrol Limited, Chevron Corporation, ExxonMobil Corporation, Shell PLC, TotalEnergies, Bharat Petroleum Corporation Limited (BPCL), BP PLC, FUCHS, Gazpromneft - Lubricants Ltd, GS Caltex Corporation, Gulf Oil International Limited, Hindustan Petroleum Corporation Limited (HPCL), Ltd., Indian Oil Corporation Limited (IOCL), Kuwait Dana Lubes Company, Liqui Moly, Motul, Pennzoil, Petro Canada Lubricants, Petroliam Nasional Berhad (PETRONAS), Philips 66, Repsol, Sinopec, and Valvoline Inc.