The marine lubricants market was valued at USD 4.45 billion in 2021 and is estimated to reach USD 5.37 billion in 2027, witnessing a CAGR of 3.19% during the forecast period. The global marine lubricant market is expected to witness shipments of 2,197 kilotons by 2027. Globally, the demand and adoption of high-performance marine lubricants are high due to the rising concerns about reducing carbon footprints, sustainability aspects, and the introduction of the 2013 VGP regulation and IMO 2020 regulation. This has led to the use of environmentally acceptable lubricants (EALs) based on PAOs that enable marine operators to comply with the regulation while reducing the carbon footprint in the shipping industry. This existing and upcoming demand can be broadly classified into base oil type, application segments, and end-user segments.
Marine lubricants are the special class of lubricants that are used to lubricate shipping equipment (such as air compressors, ship engines, piston rings, roller bearings, compressor blades, enclosed gear, and gas turbine systems, among others); that improve the overall efficiency of the engine and equipment operating in coastal areas. It plays a fundamental part in protecting the machines from rust, corrosion, moisture, oxidation, and breakdown, thus enabling the machine to operate under harsh conditions. Factors such as the demand for higher-performance marine lubricants and the transition from conventional feedstock to modern feedstock (such as base oil and additives) to produce high-quality base stock have contributed to the global marine lubricants market.
The marine lubricant industry has significantly changed due to customers' evolving needs and preferences. Two foremost factors, such as the demand for higher-performance marine lubricants and the transition from conventional feedstock to modern feedstock (such as base oil and additives) to produce high-quality base stock, have contributed to the changing market landscape in the marine lubricant industry.
The established markets of Europe and APAC are expected to witness high demand for high-performance marine lubricant products during the forecast period due to the increasing adoption of 40 BN cylinder oil in marine equipment and the high marine trade. Thus, this offers vendors many opportunities during the forecast period.
TRENDS & DRIVING FACTORS
Bio-based Marine Lubricants is Gaining Momentum
The demand for bio-based lubricants is gaining momentum in the marine oil industry due to the increasing concerns about controlling ocean pollution and enabling marine operators to reduce their environmental footprint. This is driving the use of bio-based marine lubricants.
Conditions for bio-lubricity:
- Biodegradability: Preparations containing at least 90% of a substance that biodegrades to at least 60% in 28 days, per OECD specifications.
- Minimal Toxicity: Any preparation or substance that clears OECD 201, 202, and 203 standards for acute toxicity testing.
- Non-bioaccumulative in Nature: Each product constituent that is non-biodegradable has to be tested to establish its “non-bioaccumulative” properties.
“Research suggests that every year around the world, between 37 million liters and 61 million liters of “operational lubricant” are discharged into the harbors and ports.”
Various policies and standards also mandate the use of bio-lubricants in marine vessels. For instance, as per Vessel General Permit (VGP), bio-degradable substances are mandated to be used for marine vessels operating in the North American region. Similarly, EU Ecolabel can be applied to any bio-lubricant, satisfying the required criteria in Europe. Additionally, bio-based lubricants reduce the health risk for employees and are gentle on the environment utilizing, protecting the aquatic life in case of spilled lubricants. So, in response to consumers’ healthy and sustainable lifestyles, vendors in the industry are actively sourcing marine lubricants based on renewable sources.
A Steady Shift From Group I Base Stock To Group II Base Stock
With the increasing concern on reducing engine pollution, growing trends towards better fuel economy, and the rising engine oil durability, the demand for group II & group III base oil is gaining momentum for formulating marine lubricants. Although group I base oil has been used for decades in producing marine lubricants and trunk piston engine oil (TPEO) for medium-speed, four-stroke engines, its demand is still declining in the global marine lubricants market. Primarily because the group I base stocks have low thermal and oxidative stability, making it undesirable for them to operate during severe conditions in modern-day engines. It also makes it difficult for the marine operator to comply with the regulations.
Benefits of Group II base stocks:
- Enhanced oxidation control
- Better NOACK stability
- Superior viscosity control
- Better base number retention
- Easy availability and low cost
Group II base stocks combined with selective additives provide added beneficial properties, thus delivering optimum performance and protection to equipment and machinery.
The major challenge faced in the marine lubricant market is the increasing raw material price. Base oil is the prime feedstock for producing marine lubricants. Presently, the prices of these raw materials are witnessing a rise primarily due to the current war between Russia and Ukraine that disrupted the supply chain in the lubricants industry, and sanctions in Russia reduced the supply of lubricants. In addition, the high crude oil price is also the factor contributing to the high cost of base oil, additives, and transportation, which directly leads to high prices for marine lubricants.
INSIGHTS BY BASE OIL
The marine lubricants market by base oil is divided into three segments: mineral, synthetic, and bio-based base oil. The mineral base oil is the most used feedstock for producing marine lubricants. However, as we advance, synthetic base oil is expected to witness the highest growth due to its superior properties compared to mineral oil. Synthetic base oils offer high flash points, can withstand any operating temperature, are environmentally friendly, and the machine's service life is twice that of mineral oil. Additionally, synthetic marine lubricants enhance vessel productivity, promote fuel economy, and reduce overall operational costs by reducing oil change interval and maintenance costs.
INSIGHTS BY APPLICATION
Based on application, the marine lubricant market is divided into six segments: engine system, gear system, motor & auxilaries, hydraulic system, air compressor, and others. Engine systems held the highest share in the marine lubricants market in 2021 in terms of volume, and during the forecast period, the engine system is expected to lead the market. This is primarily due to its presence in all large to small and mid-size ships. The engine system is a vital component of marine vessels. It plays a vital role in ensuring the smooth functioning of the marine voyage by protecting the engine against wear and tear, friction, and breakdown of marine components. It also fuels and powers all marine vessels, from watersport ships to naval vessels.
INSIGHTS BY END-USE
The end-use industry is divided into five segments bulk carriers, tankers, container ships, general cargo, and others. Bulk carriers held the highest share in the marine lubricants market in 2021 and are also expected to lead the market during the forecast period. Primarily due to the rising bulk carrier ship that consumes a significant chunk of lubricants for lubricating rolling bearings, threaded spindles, hinge, engine, and others for the vessel's maintenance. Factors such as rising seaborne trade, expanding urbanization, and increasing investment by the developing economies to boost their shipping industry are leading to an increased demand for bulk carrier ships.
- APAC is the largest and fastest-growing region in the global marine lubricants market. The Asia-Pacific region is led by China, Japan, and South Korea. Marine lubricant products are witnessing a surge in demand from commercial vessels, tankers, general cargo, and container ships. The high penetration of coastal and inland waterways makes most of the region's demand for marine lubricant products such as cylinder oil, trunk piston engine oil, system oil, gear oil, and stern tube lubricants.
- Europe is the second largest market in the global marine lubricants market. Factors such as steady economic growth, good infrastructure for shipbuilding, and higher disposable income among consumers are driving the industry. Europe also has robust innovation and technological support for producing complex vessels such as cruise ships, dredgers, and mega-yachts. In addition, aspects such as temporary startup of coal-fired power plants owing to shortage of pipeline natural gas, commodity trade growth between Asia and Europe. Such factors are expected to boost the shipping industry further, thereby propelling the marine lubricants market.
- North America is the third-largest market for marine lubricants and accounts for 9.26% (value) of the global market. The strong penetration of the shipbuilding industry majorly drives the marine lubricant market in North America. The U.S. holds a significant market share in the global marine lubricant market and is expected to grow significantly in the forecast period. The U.S. is one of the major hubs for marine lubricant production due to the abundant availability of base oil feedstock and developed infrastructure for transportation, which attracts global players to set up their plants in the country. Chevron Corporation, Exxon Mobil Corporation, Cortec Corporation, Valvoline, and Penrite Oil are the key players in marine lubricants in the U.S.
The global marine lubricant market is moderately fragmented, and the degree of fragmentation is expected to accelerate during the forecast period. There are a significant number of global and domestic vendors across the geographies. Important global marine lubricant market players include TotalEnergies (France), Shell (Netherland), Exxon Mobil Corporation (US), Chevron Corporation (US), Fuchs (Germany), and Liqui Moly (Germany), among others. The high entry barriers characterize the market due to the mandate policies and standards for improving the overall energy demand and consumption of marine equipment. The market is expected to witness significant changes in raw materials, technology, and ingredient content in marine lubricant products.
- In September 2019, Chevron Corporation launched high-performance gear oils for marine clutched gear systems that protect against extreme pressure, load, and shock.
- In June 2021, Chevron Corporation formed a joint venture with Akwa Group to expand further across African ports in Niger, Gabon, Senegal, Benin, Tunisia, and the Democratic Republic of Congo.
- In June 2022, Shell and CMA CGM Group entered an agreement in which Shell is expected to supply LNG to CMA CGM Group as marine fuel from the later half of 2023. This strategic agreement would enable the firm to achieve the goal of decarbonization.
- In January 2021, Shell signed an agreement with Carnival Corporation, a cruise line operator, to supply high-performance marine lubricants for its cruise ship.