At a time when India is trying to move away from the internal combustion engine to EVs and alternate fuels, specialty chemicals company Infineum International has decided to set up a state-of-the-art blending facility for engine oil additives in India.
12 Nov 2024 | 4740 Views | By Shahkar Abidi
In the competitive, often discreet world of specialty automotive chemicals, Infineum's latest move has industry watchers buzzing. The UK-based additive manufacturer, a joint venture between ExxonMobil and Shell, has announced a major leap forward with a state-of-the-art blending facility in India—an ambitious expansion aimed at one of the fastest-growing automotive ...
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In the competitive, often discreet world of specialty automotive chemicals, Infineum's latest move has industry watchers buzzing. The UK-based additive manufacturer, a joint venture between ExxonMobil and Shell, has announced a major leap forward with a state-of-the-art blending facility in India—an ambitious expansion aimed at one of the fastest-growing automotive markets in the world. As automobile sales surge across India, Infineum's latest facility, which will make additives for engine oils, underscores its confidence in the country's auto manufacturing sector.
Scheduled for completion by March 2025, the facility will start trial production mid-year, with full-scale commercial blending set to begin by the third quarter, according to S.K. Raghuram, Infineum's India Head. “We plan to get it fully operational by Q3 2025,” Raghuram noted during the company's 25th anniversary celebration in Jaipur.
The facility will focus on blending sulphonate and salicylate packages—two chemical additives critical to automotive lubricant performance. Sulphonates keep engines clean by preventing sludge and varnish build-up, while salicylates contribute anti-wear and anti-corrosion properties, helping protect engines from the effects of friction and oxidation.
Infineum facility aims to offer more than just production capacity; it is designed to give automotive lubricant manufacturers a customisable toolkit, according to company executives. By allowing for precise blending of sulphonates and salicylates, the company will enable clients to fine-tune formulations for performance attributes ranging from engine cleanliness to fuel economy, with each blend adaptable to meet regulatory requirements and evolving consumer demands. This customisable approach gives Infineum a competitive edge as automakers increasingly seek differentiated, high-performance lubricants.
According to the company, oil drain intervals have increased significantly in India, and the change in oil quality levels in the market reflects this, even as aspirational levels are more aligned with European and North American expectations. Some of the challenges include oxidation and nitration control, viscosity control, extended soot handling capacity, water protection at lower viscosity and aftertreatment performance protection. However, local conditions and requirements add further considerations, including overloading, heat and humidity and cost sensitivity and total cost of ownership.
Betting Big on Automotive Boom
The latest expansion places Infineum in direct competition with several other players who are also sharpening their focus on India, drawn by rising vehicle sales and the corresponding demand for high-quality lubricants and additives. As global supply chain disruptions prompt companies to explore more localised production models, Infineum's India facility represents an evolution of its regional strategy, building on its existing full-service support operations that include chemical support testing and complex supply chain management.
Established in January 1999, Infineum has grown its global presence significantly, with production facilities and technology centres across Asia, the Americas, and Europe. Its India venture adds to a network that includes manufacturing plants in New Jersey, Rio de Janeiro, Cologne, Vado Ligure, Singapore, and Zhangjiagang, as well as partner-operated sites in France.
Since entering the Indian market, Infineum has actively contributed to the country's efforts to lower vehicle emissions. It began by supporting the first phase of the Corporate Average Fuel Economy (CAFE I) standards in 2017, which set a goal for vehicle emissions at 130gm of CO2 per kilometre. A few years later, in 2020, Infineum played a key role in helping meet new requirements for engine oil upgrades, aligning with both the BS6 (phase 1) emissions standards and the updated CAFE II target of 113 grammes of CO2 per kilometre.
In 2023, Infineum continued this trend by supporting the introduction of BS6 (phase 2) standards, which further tightened emission limits, and helping to implement the Commercial Vehicle (CV) FE2 fuel economy norms. Looking ahead, the company is preparing for the ambitious CAFE III target of 91.7 grammes of CO2 per kilometre, expected to roll out in 2027, alongside CV FE3. There are also plans for potentially even stricter CAFE IV and CV FE4 standards by the end of this decade.
Infineum leaders are aligning the company's goals with the global shift towards greener technology, balancing this transition with practical measures. This approach includes new investments to expand their technical capabilities, making better use of existing resources, and staying responsive to what customers need. Infineum is navigating this evolving landscape amid rapid advancements in areas such as autonomous driving, advanced driver assistance systems (ADAS), cybersecurity, vehicle weight reduction, and energy efficiency.
Beyond Viscosity: The Rise of Re-refined Base Oils
As Infineum presses forward with its expansion plans, it shares a common goal with the rest of the automotive lubricant industry: sustainable growth. While the sector has traditionally focused on friction reduction and viscosity—the keys to fuel efficiency—a quiet development is brewing in lubricant chemistry, according to company officials. This shift could significantly alter the industry's environmental footprint. This development, centred on reducing lubricants' cradle-to-grave carbon footprint, has drawn attention from industry giants. At the forefront of this push are re-refined base oils, or RBOs, which are challenging long-held beliefs that recycled oils are a poor substitute for virgin products. Once dismissed as lower-quality, RBOs have advanced in performance, positioning them as a key tool for cutting carbon emissions in transportation.
Chris Locke, Executive Vice President of Commercial at Infineum, highlighted the substantial impact of this innovation during a panel discussion at the event. “You've also got the capability to introduce bio circular or, in some cases, refined bio-derived materials as feedstocks in the additive package or the lubricant itself and that can, when you conduct an overall life cycle analysis, lead to the lubricant having up to 90% reductions in the carbon footprint of the material itself,” Locke stated, underscoring how lubricant composition has become as important to sustainability as viscosity or friction control. Panellists included automotive industry leaders Alok Sharma, Director of R&D at Indian Oil, and RM Petkar, President & CTO of Tata Motors, and was moderated by Hormazd Sorabjee, Editor of Autocar India.
For Locke, the journey towards more sustainable lubricants involves two crucial areas: viscosity and friction modification, alongside the materials used in lubricants. Reflecting on his 30-year career, Locke noted, “When I first came into the industry, monograde oils were extensively used, particularly in heavy-duty applications.” Monograde oils, built to work efficiently within a single temperature range, have largely given way to multigrades like 15W-40 and 10W-40. Multigrades offer viscosity versatility, with the 'W' denoting 'winter', indicating the oil's thickness at low temperatures.
Today's innovations have introduced 5W oils, and research is even exploring ultra-thin 0W-20 oils with superior cold-weather performance and energy-saving potential. These low-viscosity oils are instrumental in improving fuel economy, particularly in heavy-duty engines where internal energy loss from churning can be substantial. Passenger vehicles, by contrast, benefit most from reducing friction in high-stress components like the valve train and ring pack. Advanced friction modifiers, ranging from metallic to non-metallic types, have become essential in achieving these efficiency gains.
Locke emphasised that reducing friction and improving viscosity, while critical, represent only part of the sustainability equation. RBOs, in particular, have transformed perceptions of lubricants by proving that recycled oils can match—if not surpass—virgin oils in quality. RBOs embody a 'closed loop' approach, keeping carbon within an above-ground cycle by recycling used materials rather than extracting new ones, which helps curb carbon emissions tied to oil production.
Locke explained that these bio-circular materials allow the industry to break from the traditional cradle-to-grave lifecycle, creating lubricants that are sustainable from production through disposal. This pivot towards bio-based innovation marks a subtle shift in how lubricant companies measure success: where fuel efficiency and friction control once reigned, reducing environmental impact is now equally vital.
This dual approach—maximising the lubricant's efficiency within engines and advancing its sustainability profile—could play a foundational role in prolonging the relevance of the internal combustion engine (ICE) even as electrification gathers pace. Locke concluded that, while electrification remains a long-term goal, enhancing ICE sustainability offers a crucial pathway to reducing emissions in the near term. The pace of this transition, he noted, will vary by region, shaped by economic factors, geopolitics, and cost considerations.
The Rise of Biofuels
In addition to the new products, technology, and sustainable growth, another key area of focus during the conference in Jaipur was the rise of alternative fuels and its related implications on the lubricant industry.
For instance, industry experts pointed out that India's ambitious push towards ethanol blending was facing a roadblock from cost pressures. The 2G ethanol production programme, once touted as a game-changer, is now facing significant challenges due to high production costs. While the government's target of 20% ethanol blending by 2025 remains unchanged, the economic viability of 2G ethanol production is increasingly coming under scrutiny.
The crux of the issue lies in the production cost of 2G ethanol, which hovers around Rs 160 per litre. This price point, comparable to premium 100-octane fuel used in luxury cars and motorcycles, makes it difficult for oil marketing companies (OMCs) to absorb the additional cost without government support. Parallelly, even original equipment manufacturers (OEMs) are also asking for some tax rebates and other incentives as modifications are required to be made in the engines for running vehicles with a higher ethanol percentage of fuel.
Furthermore, as India gears up for the potential introduction of 3G ethanol, derived from algae, the economic challenges are likely to intensify. The higher production costs associated with 3G ethanol could further strain the OMCs and the overall ethanol blending programme.
Alok Sharma, Director, R&D at Indian Oil, said, “They (Government) have allowed different prices for different types of fields that are used for making ethanol. But once you come to 2G ethanol and 3G ethanol, the prices are higher. Even the OMCs have approached the government to give a special price, but the government has not agreed.” Sharma spoke during a panel discussion that was moderated by Hormazd Sorabjee, Editor, Autocar India, and also included RM Petkar, President and Chief Technology Officer, Tata Motors, and Chris Locke, Executive Vice President of Commercial at Infineum, as other participants. “In 1G ethanol, the cost is not an issue for the producers right now,” Sharma noted.
Rising Complexities
The three generations of biofuels—1G, 2G, and 3G—are distinguished by their feedstocks, manufacturing processes, and associated costs. While 1G biofuels, derived from food crops like sugarcane, corn, and wheat, are relatively inexpensive and straightforward to produce, their reliance on edible resources raises concerns.
2G biofuels, on the other hand, employ non-food, cellulosic biomass such as agricultural residues and woody biomass. However, their production is a more complex process, requiring pretreatment to break down cellulose and hemicellulose into sugars, followed by fermentation.
Finally, 3G biofuels, primarily derived from algae, involve cultivating the organism in controlled environments before extracting oils and converting them into ethanol. This approach, though promising, is still in its nascent stages and faces significant technological and economic hurdles.
“So, unless we have a mandate there, we also will not be interested in producing that 2G ethanol because the price is coming in at about 160 rupees a litre,” Sharma highlighted. Sharma, however, noted that with a number of manufacturing plants coming up, the cost is likely to come down going forward.
In the Ethanol Supply Year (ESY), which runs from November to October, the blending of ethanol with petrol stood at 38 crore litres with a blending percentage of 1.53% in ESY 2013-14. By ESY 2020-21, the blending volume surged to 302.3 crore litres, increasing the blending percentage to 8.17%. During this same period, petrol consumption also rose by approximately 64%.
The momentum continued, with blending further increasing to over 500 crore litres in ESY 2022-23, raising the blending percentage to 12.06%. In the current ESY 2023-24, the blending percentage surpassed 13% with approximately 545.05 crore litres of ethanol blended as of August 31, 2024. “This remarkable progress underscores a significant increase in the overall ethanol blending percentage, rising from 1.53% in 2014 to an impressive 15% in 2024,” a government release stated.
As per government records, over the past decade, this initiative has delivered significant benefits, including savings of Rs 1,06,072 crore in foreign exchange, a reduction of CO2 emissions by 544 lakh metric tonnes, and a substitution of 181 lakh metric tonnes of crude oil. Furthermore, the programme has had a considerable economic impact, with OMCs disbursing Rs 1,45,930 crore to distillers and Rs 87,558 crore to farmers.
However, to achieve the target of 20% ethanol blending by 2025, approximately 1,016 crore litres of ethanol will be required. The total demand for ethanol, including other uses, is estimated to be around 1,350 crore litres. To meet this requirement, an ethanol production capacity of about 1,700 crore litres must be established by 2025, assuming the plants operate at 80% efficiency.
The road ahead for India's ethanol blending programme, as per the industry experts, remains fraught with challenges, particularly concerning the economic viability of 2G and 3G ethanol production. While significant progress has been made in 1G ethanol blending, the higher production costs of the subsequent generations pose a significant hurdle. Unless the government implements supportive policies, including price incentives and tax breaks, the ambitious target of 20% ethanol blending by 2025 may prove difficult to achieve. It remains to be seen whether the government will take proactive steps to address these challenges and ensure the long-term sustainability of India's ethanol blending programme.
In addition to ethanol, biodiesel is another alternative which is facing strong headwinds on account of supply bottlenecks, manufacturing, and efficiency issues, which have slowed down its adoption despite the push from the central government over the last decade. In India, biodiesel is produced primarily from non-edible vegetable oil, acid oils, animal tallow, and palm stearin oil. Domestically available used cooking oil (UCO) has been identified as a potential raw material for biodiesel production in the National Policy on Biofuels, 2018. The waste cooking oil can be collected in bulk from consumers such as restaurants, hotels, etc., for conversion into biodiesel, as per a policy brief prepared by The Energy and Resources Institute (TERI), a think tank.
India has already established a 5% biodiesel target by 2030, which would require almost 4.5 billion litres of biodiesel per year, according to IEA estimates. Mobilising production will require a similar mix of policies as provided for ethanol, including production support, guaranteed pricing, and feedstock support, especially for mobilising residue oils like used cooking oil and vegetable oils grown on marginal land.
Amidst the challenges, Indian Oil, India's largest state-owned oil and gas corporation, is urging the government to allow biodiesel to be processed alongside traditional crude oil at its refineries, a shift it argues, could go a long way in realising the country's ambitions for a 5% biodiesel blend by 2030. Alok Sharma, the company's Director of Research and Development, underscored this proposal at the Infineum Conference 2024, suggesting that integrating biodiesel processing within existing facilities could streamline operations and improve efficiency.
“We're trying to propose to the government that we can co-process these oils in one of the refinery units, and we can meet the mandate for biodiesel,” Sharma remarked. “Instead of producing biodiesel separately, we can co-process with diesel, and we get a superior diesel. So that's an option on which we are already working on the R&D, and we have established the method,” Sharma added.