[TREND 16] Bio-Lubricants Business Scrutinized
In a response to tightening carbon neutral policies, the contribution of bio-lubricants is now being scrutinized from a life cycle assessment perspective (their from-cradle-to-grave carbon footprint reduction effect). Bio-lubricants constitute a small fraction—less than 2%—of the finished lubricants market globally. However, the average growth rate for bio-lubricants is expected to be above the general trend for finished lubricants.
Given the stringent environmental protection policies, along with a strong market pull from a segment of environmentally conscious customers, North America and Europe are the largest bio-lubricants-consuming regions. Both markets tend to adhere to regulations and have high sustainability standards. Additionally, Europe displays a higher willingness to pay a premium if the same performance is provided. This is something that market participants refer to as the “feel-good factor.”
Tighter environmental regulations and technological advancements will be key factors shaping the global bio-lubricant market of the future. Improving the technical performance of bio-lubricants will enhance the cost-benefit trade-off of using these products in place of their mineral counterparts. Changing consumer attitudes coupled with “rebuild better” governments initiatives in the aftermath of COVID-19 will also impart momentum to this market.