The latest standard will cause lubes producers and consumers to change their habits.
After being trialled first in Shanghai and Beijing, the National IV emissions standard will be implemented nationwide from the beginning of July. The policy will be a breath of fresh air for urban dwelling environmentalists, but not for all industries.
Consumer habits are set to change Image: Sinopec |
Automotive executives have expressed their concerns, but have vowed to divert extra resources into R&D to develop cleaner engines. The state’s major oil corporations have collectively invested tens of billions of dollars to upgrade their stodgy refineries and this already seems to be paying off with production of higher quality lubes.
Business at China’s numerous lubricant companies, however, is likely to become a great deal harder. Currently, China’s lubricants industry is dominated by companies producing CD grade lubes, with only a few reaching the API or CF-4 standards, and these low-level lubes will struggle to meet the new phosphorous and nitrogen requirements.
Even if these small firms manage to upgrade their facilities, they well still need to wean consumers of cheap, dirty lubes. A recent study found that only 70% of vehicles conformed to the National III standard, with less than 50% of diesel-powered commercial vehicles meeting the criteria.
Although the factory fill on many newly produced motorcycle and trucks is CF-4, vehicle owners frequently select cheaper options. Not only does this shorten refill intervals, but it also damages the engine and exhaust mechanisms.
Lubes marketers and producers will need to educate consumers if they are to justify the price hikes needed to upgrade their products.