Will COVID-19 Enhance the Case for Bio-Lubricants?

The first hurdle in analyzing the bio-lubricants market is to define bio-lubricants, as it seems that different market participants use the term to mean different things. This tendency is implicitly encouraged by the various government programs that promote the use of bio-lubricants. They tend to focus on one aspect of the product – for example, the U.S. Federal Bio-Preferred program focuses on a bio-lubricant being “bio-sourced”- and is silent on other aspects of the product. Kline’s definition of bio-lubricants includes criteria: biodegradability, bio-sourceability, and non-toxicity. With global demand under 350 kilotonnes, bio-lubricants constitute a small fraction—around 1.6%—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. North America and Europe are the largest bio-lubricants-consuming regions, given the stringent environmental protection policies in place in those regions, along with a strong market pull from a segment of environmentally conscious customers. 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.” Moreover, companies in the European Union (EU) and North America are increasingly engaging in Corporate Social Responsibility (CSR) practices, behavior that will only grow in the aftermath of COVID-19.

Tighter environmental regulations and technological advancements will be key factors shaping the global bio-lubricant market of the future. Environmental regulations focusing on sustainability, carbon neutral operation and reducing carbon footprint, and low toxicity and zero bioaccumulation will drive bio-lubricant use. On the other hand, 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 in the aftermath of COVID-19 will also help.

Like all other industries, a buoyant bio-lubricant market has been heavily impacted by the COVID-19 pandemic. The long-term consequences remain to be seen, though the adverse effect of the ongoing crisis is apparent in 2020. In Kline’s base-case scenario, the global bio-lubricant market is forecast to grow at a CAGR of 3.5% over the next five years.

Join Kline’s upcoming webinar, “Will COVID-19 Enhance the Case for Bio-Lubricants?” to understand the current bio-lubricants market and the impact of COVID-19 on its outlook.

This webinar will draw insights from the newly published report: Bio-Lubricants: Market Analysis and Opportunities, which provides a comprehensive analysis of the opportunities and challenges in the bio-lubricants market. It also assesses key lubricant product categories where the use of bio-lubricants is growing and evaluates the various market forces driving growth. The effect of COVID-19 and its impact on bio-lubricant demand in 2020 and beyond is also examined.

Share this
Posted in Energy.