The Value of Performance

Engine Oils Marketing October 2011

UEIL

The Lubrizol Corporation 2011, all rights reserved

The Year is 1994

Brazil win the Soccer World Cup

OJ Simpson is facing charges in

the US court system

The Channel tunnel opens

between France and England

ANC triumphs in first multiracial

elections and Nelson Mandela
becomes president of South
Africa

Croatian born Goran

Ivanisevic is runner up at the
Wimbledon Tennis
Championship
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The Year is 1994

Imagine that Goran Ivanisevec is driving from his home
country to Wimbledon is a new diesel powered car
meeting the newly adopted Euro 1 specification.
The distance is 2,385 kilometres. If the car was meeting
the Euro 1 limits for particulate emissions, the total
amount of particulate matter produced would be 334
grams.

2,385 x 0.14 = 334

Distance
Travelled / Km

EURO 1 Limit
g/Km

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Total Mass of
Particulate / g

2,385 Km

The Year is 2011

If that same journey of 2,385 kilometres were conducted
today in a modern diesel powered vehicle meeting the
latest Euro 5 emission standards, the total amount of
particulate matter produced would be 11.9 grams.
Particulate Matter Produced
400
300

96.4% Reduction

200
100
0
1994

2011

Significant Progress has Been Achieved in Emissions Reduction

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The Progress in Passenger Car Diesel Emissions

0.14

Particulate Matter

0.10

EURO 2

0.05

EURO 3
0.025

EURO 4
0.005 EURO 6
0.08

EURO 5
0.18

0.25

0.5

(No Nox limit for Euro 1 and Euro 2 for diesel car emissions)

EURO 1

NOx

EURO Emissions Standards Represent Significant Reductions in Harmful Products of Combustion

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The importance of Emissions Control

Studies by the EPA indicate exposure to particulate matter causes serious health
problems.
Long term exposure problems include:
Reduced lung function
Chronic bronchitis
Premature death
Short term exposure problems:
Lung disease
Asthma
Acute bronchitis
Respiratory infection
Other problems include:
Heart attacks in patients with
heart disease
Arrhythmias

Up to 600,000 deaths per year are associated with airborne particulate matter*
6

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* Source : World Health Organisation

Passenger Car Vehicle Hardware Changes

The introduction of more sophisticated hardware to realize the improved

emissions control will provide significant challenges for engine lubricants
Gasoline

Euro 3

Euro 4

Euro 5

Euro 6

2000

2005

2009

2014

Engine design

PFI

PFI + GDI

T-GDI

T-GDI

Aftertreatment

TWC

TWC

TWC

TWC +GPF

Euro 3

Euro 4

Euro 5

Euro 6

2000

2005

2009

2014

Engine design

IDI + DI

DI

DI

DI

Aftertreatment

EGR

EGR +DPF

EGR +DPF

EGR +DPF +SCR

Diesel

Source : Lubrizol

KEY

Engine design types

Aftertreatment system types

PFI
GDI
T-GDI
IDI
DI

TWC
GPF
EGR
DPF
SCR

Port fuel injection gasoline

Direct injection gasoline
Turbo charged GDI
Indirect injection diesel
Direct injection diesel

Three-way catalyst
Gasoline particular filter
Exhaust gas recirculation
Diesel particulate filter
Selective catalytic reduction

A combination of engine design changes and after treatment devices are utilized
7

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The Demand for higher Quality Lubricants

Changes in vehicle hardware can increase severity
Indirect
injection

Direct
injection

Greater deposit protection

and soot handling

Nonturbocharged

Turbo
charging

Greater protection against

thermal degradation

No EGR

Exhaust gas
recirculation

Greater soot handling and

corrosion protection

Basic or no
aftertreatment

Advanced
aftertreatment

Aftertreatment compatible
additive technology

Maintaining Durability will Continue to Drive Increases in Engine Oil Performance

8

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The Emergence of Low SAPS Lubricants

The changes in engine design and the introduction of after treatment devices
has led to the introduction of a specific family of high quality engine lubricants.
In 2004 ACEA formally introduced the C category of passenger car lubricants.
Specifically designed for vehicles fitted with after treatment devices where
traditional higher SAPS lubricants can potentially damage vehicle components.
0.8%
Sulphated ash

0.5%
Sulphated ash

ACEA C3

ACEA C4

ACEA C2

ACEA C1

3.5 HTHS
2.9 HTHS

A Specific Family of Passenger Car Lubricants has Emerged

9

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Associated OEM Requirements

The ACEA categories form the framework for several OEM requirements.

Many OEMS have several specifications within a particular category, mirroring

the engine design platform and after treat device complexity.
0.8%
Sulphated ash

3.5 HTHS

0.5%
Sulphated ash

BMW LL-04
MB229.31 / MB229.51
Porsche C30 / A40
VW50400/50700
VW 50200/50500/50501
GM dexos 2

Ford 913-C
Renault RN0720

PSA B712290

Ford 934-B

2.9 HTHS

Many OEMs have Specifications that Require LOW SAPS Lubricants

10

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The High Cost of Lubricant

Development
The high cost of engine test programs
is well published. An ACEA C3,
VW504:507 test program can
typically cost 1.5 million dollars.
However, this is by no means the
complete picture. Before an additive even
reaches a test engine, there are significant
costs associated. In the case of top tier engine
lubricant additives these can typically be in
excess of 5 million dollars!
A further consideration is the time it takes to
progress an additive from conception to reality.
The total time span can typically be 5-6 years.

There are a Lot of Hidden Costs in Bringing Top Tier Lubricants to Market
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Finished Passenger Car Lubricant Pricing Analysis

Finished lubricant pricing has
been obtained in the following
countries:
UK
France
Germany
The following channels to
market were used for the
analysis:

Garage Forecourts
Workshops
Vehicle Dealers
Retail Outlets

Independent Pricing Analysis Conducted in 3 Geographical Markets

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Finished Lubricant Pricing by Quality Level

Results of a European Survey conducted by a Third Party Independent Research Group

VW 504:507

19.87

Low SAPS 5W-xx

18.39

Upper Mainline 0W-XX

17.93

Upper Mainline5W-XX

12.09

Mainline 10W-40

11.02

Mainline 15W-40

6.7

10

15

20

25

Price/cost per litre (Euro)

Lubricants were categorised into 6 different quality levels. The results above reflect the
average pricing reported within the following channels to market:
Retail : Workshop : Forecourt : Dealer
AVERAGE PRICING

Top Tier Lubricants are Retailing for Over 3 Times the Price of Mainline 15W-40
The Lubrizol Corporation 2011, all rights reserved

Finished Lubricant Pricing by Quality Level

Results of a European Survey conducted by a Third Party Independent Research Group

VW 504:507
Low SAPS 5W-xx
Upper Mainline 0W-XX
Upper Mainline5W-XX
Mainline 10W-40
Mainline 15W-40

19.87
18.39
17.93
12.09
11.02
6.7

10

15

20

25

Price/cost per litre (Euro)

Two distinct pricing levels can be seen with mainline and upper mainline 5W-xx HI SAPS
oils forming one tier and upper mainline 0W-xx and LOW SAPS oils forming the higher
value tier.

Higher Quality Lubricants Command Higher Value in the Market

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What About the Future?

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What about Future Trends?

So far we have seen that the drive towards lower
emissions, with the emphasis on NOx and Particulate
reduction has resulted in a new range of high quality
engine oils being introduced. These top tier oils
command a higher price level in the finished oil
marketplace compared to previous generation market
general engine oils. This trend will continue as we face
the challenges of EURO 6 and beyond.
We are now seeing a big emphasis on fuel economy.
This is driven on several fronts, namely :
Reducing the Cost of Ownership
Reducing CO2 Emissions
Reducing Fossil Fuel Consumption
The Lubrizol Corporation 2011, all rights reserved

 The Lubrizol Corporation 2011, all rights reserved

Environmental Drivers for Fuel Economy

End User economics is not the only
driver for improved fuel economy.
Legislators have determined that
carbon dioxide is a key contributor to
global warming and that man made
emissions of this gas need to be
reduced.
Take an average family car weighing
1600kg with a fuel tank of 60 litres
capacity. By the time the tank is filled
10 times with gasoline, the amount of
CO2 produced is equivalent to the
weight of the car!*
C8H18

O2

8CO2 + 9H2O

Clearly Something Needs to be Done to Reduce CO2 Vehicle Emissions

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* Assumes SG of 0.88

OEM status against EU CO2 limits (2009 figures)

200
Source; http://ec.europa.eu/clima/documentation/transport/vehicles/cars_en.htm

190

g CO2 / km on NEDC cycle

180

Volkswagen

170
160

Suzuki

Mazda

GM

Honda

Daimler
BMW

150
140

Fiat

Renault
Toyota

130

Ford

120

PSA

Hyundai

110
100
1,000

1,100

1,200

1,300

1,400

1,500

1,600

Vehicle Mass (kg)

19

Automakers will have to reduce CO2 emissions from new cars to 130 grams per Km
by 2012 / 2015. With an additional 10grams coming from complimentary measures
such as the use of biofuel.
65% of new vehicles will have to comply by 2012, 75% by 2013, 80% by 2014 and
100% by 2015.
A new objective of just 95 grams per Km was fixed for 2020.
Penalties will be imposed on a sliding scale. Manufacturers that exceed their target
by more than 3 grams will pay 95 euro per excess gram. Lesser transgressions will
be charged between 5 and 25 Euros.
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Once Again.. The Demand for Higher Quality Lubricants

Improvements in Fuel Economy can lead to a more severe
operating environment for the engine oil.
Heavier
viscosity
Grades

Lighter
Viscosity
Grades

Greater wear protection to

address durability concerns

Conventional
Fuels

Bio Fuels

Higher protection against

sludge and piston deposits

Standard Oil
Sump Sizes

Smaller Oil
Sumps

Normally
Aspirated
Engines

TurboCharged
Engines

Higher temperature and

associated oxidation control

Higher temperature and

associated oxidation control

Improved Fuel Economy whilst Maintaining Engine Durability is Key

20

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Summary
The move towards lower SAPS, high performance oils will continue.
This will continue to increase both the cost of development but also
the potential for higher finished lubricant costs and greater
differentiation in the marketplace.
The push for greater fuel economy will place huge technical
challenges on the engine oil. We will require oils that provide fuel
economy, not just for the in warranty period, but with potential
legislation ensuring fuel economy over the life time of the vehicle, it
is important to have fuel economy maintained even when the
engines are older.
Even today, some OEMs are exploring the possibilities of 0W-10
oils with a 2.3 HTHS. If such oils are to become commonplace, it is
essential we provide the necessary engine durability.
Delivering fuel economy whilst maintaining engine durability will
prove to be a major challenge in the coming years. The demand on
tomorrows engine oils will be greater than ever.
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22

The Lubrizol Corporation 2011, all rights reserved