Sounding Board

Several start-up companies are developing high-performance synthetic lubricant base oils from renewable feed stocks. What do you think are the main challenges in successfully commercializing their technologies?

TLT Sounding Board January 2016

Things seem to be difficult for start-up companies, but what about the lubricants industry? Survey respondents are torn when asked if our industry really is an attractive one for start-up companies to invest in. While 52% of respondents say our industry is an attractive one, 48% say our industry is not. In order to successfully commercialize technologies, most people responded by saying the main challenge is the costs and keeping them competitive. Companies also have to handle long developmental cycles, but STLE members believe there could be ways to shorten them. One reader said, “Share existing information so each company does not have to start from scratch.” Innovation into developing new synthetic lubricant base fluids derived from renewable feed stocks is significant today.
Extensive testing required to gain necessary approvals.

Providing convincing evidence that their product works better and costs less than conventionally sourced products.

Proving that there is a cost-performance benefit over current technology if there are no regulatory drivers. More difficult with lower oil prices.

Costs have to be comparable to Group III base stocks. And quantities have to be in line with the demand.

Challenges in passing oxidation test, engine tests and OEM approvals.

Proving high performance without unintended consequences.

Demonstrating performance equivalence to conventional synthetics and pricing.

Quality control and consistency in performance.

Exploiting renewable feed stocks will likely require development and use of innovative technologies that are likely to be prototypic and capital-intensive. Market acceptance of new products can be slow, resulting in significant delays between technology innovation and product development to revenue generation. The start-ups better have deep pockets. Due to smaller reservoirs, higher output expectations from smaller, more energy-efficient power plants and extended service intervals mandate that the newly developed lubricants must be able to exceed performance characteristics of more current conventional products.

Getting the coat of the product competitive with petroleum products without tax or other subsidies.

Maintaining the viscosity because of premature degradation.

Meeting the hype of physical properties.

Economics—takes a long time.

Initial high cost and lack of constraints and information available on the market about the renewable feed stocks.

Long road to commercial acceptance requires long-term investment to keep venture alive until any cash flow is realized.

Cost. They will have to compete with the current slate of petroleum-based products that are available today at much reduced costs. Not many end-users are willing to pay extra for green claims.

In many cases the commercialization is done. The cost will determine whether or not they are successful.

Top three challenges: (1.) Cost—keeping the cost competitive. (2.) Supply—being able to never miss an order is a challenge to one’s work ethics. (3.) Providing proof of product quality through testing and end-users input.

Name recognition is important to many people.

Solubility with current additive systems, cost, breaking into a very mature industry.

(1.) Money. (2.) Resistance to change.

Producing the kind of volumes that can pay off the investments quickly.

Performance claims and comparison to similar products.

Marketplace acceptance and proof of performance. Actual in-service use and studies.

Main issue will be how fast start-up companies can see capital return on investment. Not fast enough I would suspect.

Proving the applications.

Degradation is a question of concern.

Implementation into the market and cost structures of these products as compared to currently available products.

Public acceptance.

Keeping cost competitive.

Getting past the development stage and doing meaningful market development is a big challenge. The high costs and time associated with traditional development hinder the ability for these companies to gain committed collaborators and customer champions. Having to compete with the low-cost infrastructure that’s in place for traditional petroleum forces these new technologies to offer significant performance benefits that sometimes appear unrealistic.

Finding the right application and price point.

Creating a sustainable product.

The first is establishing demand. The second is filling that demand.

Cost and widespread acceptance. Our industry will try new things in small doses, but the “tried and true” will always be the safe bet and will be very difficult to displace.

Unproven field performance.

Having a consistent raw material source and process.

Making them affordable and also able to solubilize additives. A lot of these synthetic base stocks have very poor solubility.

Demonstrating a cost-performance advantage.

Effective scale-up from lab/pilot-scale to production. Establishing distribution networks. Targeting the product in the right markets.

The technical culture of the people involved.

Possible inconsistencies.

Long development cycles and huge investment costs.

Low natural gas and crude prices negatively impact the introduction of oleo-synthetic lubricant base stocks. While government regulations or preferences may provide some demand for these base stocks, general acceptance will only happen if there is a true benefit that can be realized by users. The API/SAE/ASTM approval process for automotive lubricants will be difficult for oleo-synthetics to overcome simply because of the expense of engine, transmission and gear box testing. The same applies for hydraulic approvals. These types of approvals are for high volume base stocks. Oleo-synthetics will need to focus on niche applications for the foreseeable future. After 70 years even the petroleum-based synthetic lubricant market is less than 15% of the total lubricant market.

Missing local regulations, high prices compared to old technology, OEM acceptance.

Developing sound technical reasons for their use (i.e., creating market awareness).

Start-up costs.

Lubricant base fluids are still mainly derived from petrochemical feed stocks. In 25 years, what will the lubricant base oil landscape look like?
It will still be dominated by products from petrochemical feed stocks. 33%
It will largely be based on petrochemical-derived products but with a very significant contribution from those based on renewable feed stocks. 63%
Interest in renewable lubricant products will have faded and very little will be used. 6%
Based on responses sent to 13,000 TLT readers. Total exceeds 100% because some respondents chose more than one answer.

Start-up companies for developing new synthetic lubricant base oils are faced with long development cycles of at least 15 years. What may be some of the potential ways that our industry can help in shortening the development cycle?
Work with established lubricant companies.

Consistent government regulations that foster new technology development.

Less regulatory burdens and a more harmonized global system, which is based more on the actual risks rather than just hazard statements. Regulators also could give financial incentives to projects that lead the way.

Additive companies merger to create bigger, faster and better development cycle.

Pay target companies to use the new products now.

More partner collaborations and more government subsidy support.

Industry specialists need to be involved to assist with in-plant tests and feedback.

Offer facilities, expertise and testing (such as round robin) in return for a piece of the action.

Faster approval of finished products, but this is not easily achievable.

Critical re-evaluation of lubricant specifications in line with requirements.

Perform accelerating tests to verify lifetime performance.

Work with OEMs on cross-industrial partnerships; lobby for tax incentives for OEMs that adopt new synthetic lube base oils.

Not much can be done. Good science takes time. Better collaboration, potentially through organizations like STLE, and help from the government in the form of loans/grants can help to a point.

Be willing to try the new products. Work with the start-up company. Additive companies need to work with them as well.

Partnerships with larger oil or additive companies, government subsidies.

Foster these innovations by participating in testing programs as partners with the start-up companies if there are lubrication-related problems at a specific site.

Solve real problems. Then the demand will come.

Team up with large potential customers to get help with validation and fuel the need for these products. Also government support from a liberal president may generate funding.

Fast track system for newer environmental resources or products that are made from renewable resources.

Sharing of existing information so each company does not have to start from scratch. Also more exposure to the successes of these oils in actual service.

OEMs can assist in running the field testing to gauge the performance of the oil.

Concentrated efforts in research and development shared but not likely to happen.

It takes 15 years so the lab results can be proved in the field.

Team up with current applications (get some skin in the game) and test current applications.

Be open-minded for trials of the new developments.

Enhanced testing and technical support.

The biolubricants industry needs to establish a trade organization with the sole purpose of promoting biobased lubricants in the marketplace. This was done very successfully for the biodiesel industry, which created the National Biodiesel Board (NBB). The NBB is the national trade association representing the biodiesel industry in the U.S. Such an organization can go a long way in promoting biobased lubricants. The association would have the purpose of assisting start-up companies in shortening development times, organizing forums and conferences, providing low-cost advertising and supplying marketing information among other things.

Very short test series of new products transmitted to potential customers (must be cheap or even free).

Be open to new technologies and evaluate them on their merits. Development cycles are not always 15 years; some technologies are ready much sooner.

Information sharing.

Work with smaller cutting edge companies that will get samples into the field faster.

Getting ASTM involved with a standardized process.

Hire somebody who already has 15 years of experience with this stuff.

Most of the development time is for product scale up and setting up manufacturing, not so much on the applications side. The start-ups can shorted the time frame by co-development with customers and using third-party manufacturers to get material in the market while they are building their own facility.

Collaborative R&D in key markets. The facilitation of this by knowledge transfer programs, technology networks, development schemes, etc. can be beneficial.

Going to nanotechnology lubricants.

Relax specifications to cover a broader range.

I do not think there are any quick fixes. New technology requires time to develop, test and verify. Change is difficult and not for the faint of heart. Oleo-synthetics will be accepted if their performance is worth the price.

Pushing regulations in respect to environment, lower emissions and fuel efficiency.

I’m not sure that you can do much to shorten the development cycle because it needs rigorous long-term testing. After that they have to get some major equipment builders to use their products.

Is our industry really an attractive one for new start-up companies to invest in?
Yes 52%
No 48%
Based on responses sent to 13,000 TLT readers.

Editor’s Note: Sounding Board is based on an email survey of 13,000 TLT readers. Views expressed are those of the respondents and do not reflect the opinions of the Society of Tribologists and Lubrication Engineers. STLE does not vouch for the technical accuracy of opinions expressed in Sounding Board, nor does inclusion of a comment represent an endorsement of the technology by STLE.