Indian Government’s Decision to Lubricant Industry


The Indian government’s decision to pull forward the application of stricter emissions standards to meet global norms has sent the automobile and lubricant industry into a spin and means investments of billions of dollars over the next few years, costs that will be inevitably passed on to vehicle buyers.

India, a country of 170 million vehicles, lags the West’s auto emissions standards. Based on European regulations, the country first adopted its own set of norms, known as Bharat Stage (BS), in April 2000. It has been implementing them in phases to reduce chronic air pollution.

According to a report by environmental protection group Greenpeace, 1.2 million Indians died of air pollution-related diseases in 2016 at a cost of 3 percent of GDP.

The current BS-IV norm, which is roughly equivalent to Europe’s Euro IV standard, was introduced in 2010 and implemented across India from April this year. It bans the sale of all vehicles that do not comply.

Original equipment manufacturers (OEMs) and lubricant suppliers, however, were surprised when Transport Minister Nitin Gadkari last year announced that India would jump from BS-IV to BS-VI grade fuels from April 1, 2020, skipping the BS-V phase altogether.

The government originally planned to implement BS-VI for all vehicles from April 2024 but later decided to pull forward the rollout to April 2021.

“The leapfrogging has left us with no time to really do systematic development, and that’s a challenge,” said Mathew Abraham, senior general manager at automobile major Mahindra & Mahindra Ltd.

India, the world’s third-largest carbon emitter after China and the United States, implemented the country’s first passenger vehicle fuel efficiency standards in April 2017 and the norms will become stringent from April 2022 onwards.

“It’s not that we don’t have solutions, but we need time to develop all those solutions,” Abraham said.

The government’s urgency to implement tighter emissions norms is understandable as India is a signatory to the Paris Agreement on Climate Change.

As part of the agreement, the country has to reduce the emissions intensity of its economy by 33 to 35 percent by 2030 from 2005 levels of roughly 1.07 metric tons per capita.

To develop optimized lubricants that meet the performance challenges and customer expectations of the BS-VI era, suppliers will have to consider factors such as retaining drain intervals, fuel economy, and ATD protection, Mahindra & Mahindra’s Abraham said.

“We are reaching a level of uncertainty and how to tackle those is going to be the biggest challenge,” he said.

Abraham also stated the dedicated lubricants will be needed as per the technology used, while gas engines and hybrid engines would require special lubricant for better efficiency.

However, that reduced SAPS (sulfated ash, phosphorus, and sulfur) lubricants will be the main reference oils in the BS-VI era, and a search for fuel economy will push the industry toward thinner grades.

“It’s even more critical in India because we are a tropical country, so temperatures are very high, and durability is going to be a serious threat for all the OEMs,” he said.

So, the significant fuel economy benefit can be seen by reducing an oil’s viscosity grade from SAE 15W-40 to SAE 15W-330 and SAE 5W-30.

“In the coming years, you will find that the use of high-quality base stocks is going to play a very strong role within the industry,” he said.

Minaketan Panda, senior manager for technical services at Hindustan Petroleum Corp. Ltd., said Group II and Group III base stocks are likely to play a big role in the future in India, the world’s third-largest lubricant market. Group IV is definitely going to be there but the cost will be a critical factor in determining their usage, he added.

Lubricants Oil Market

“If you look at the thermal and oxidation stability of these base oils, you will see that Group III and Group IV or Group IV and Group V are going to be the order of the day in Euro VI,” Panda said.

In diesel engine oil, API CK-4 and API FA-4 will be the specifications in 2020, he added.

With BS-VI implementation, India will certainly achieve its aim of meeting global emissions standards, but the technology upgrade would push vehicle costs higher, which could pose a challenge for automobile companies going forward.

Therefore, it is imperative that manufacturers work with all the suppliers and the ecosystem to develop affordable solutions for the customers.

This report has made on an article of Lubes N Greases

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