By Vicky Villena-Denton and Aaron Stone
Highly competitive. Increasingly complex. This, an assessment of China’s lubricant market by Jerry Wang, who recently transferred from his role as Chevron Oronite’s technology manager in China to prepare for his upcoming retirement. Wang, who spoke to F&L Asia last November in Shanghai, was responsible for managing Oronite’s Product and Technology organization in China, with a focus on automotive engine oils. The industry veteran proposes that specification development in China is far more complicated than in other countries throughout the world.
China has evolved from a simple market to a multifaceted one that comprises a variety of engine oil specifications. While progressively more industry groups lament slow and cumbersome standard development processes, Wang sees the development of oil specifications outside of China as comparatively straightforward. North America observes the American Petroleum Institute’s (API) quality standards, which Wang suggests is relatively simple with a logical evolution; the Japanese Automotive Standards Organization (JASO) dictates Japan’s automotive ideals and the European Automobile Manufacturers Association (ACEA) maintains ACEA Oil Sequences, perhaps similarly complicated but nevertheless limited to Europe.
On the other hand, the Chinese market is a mixture of API, ACEA, GB, with looming add-ons that include a domestic heavy-duty diesel engine oil specification (D1-2019), and the possibility of a new fuel economy engine oil test. “The challenge with China is that we have everything. All of the above, and they are equally important,” says Wang.
GB refers to the China national standard, which is essentially based on API, though China has added its own interpretation to it such as water, pour point and impurities — much of which is based on Russian military spec. A notable variance from API is the application of non-critical limits. In China, a limit is a limit, declares Wang.
The national standard, dictating passenger car motor oil (PCMO) and diesel engine oil performance standards, is desperately in need of an update. The most recent revision occurred in 2006, with a current PCMO standard equivalent to API SL/ILSAC GF-3 and diesel oil only up to API CI-4. A submission by the GB drafting committee in 2016 requesting approval for an update denotes preliminary efforts to modernize the standard, though the request is still awaiting a response, says Wang. Even after approval, it can take several years to come up with a final draft and secure release.
Wang notes that the GB process can be very disruptive because of the way inspections are managed. In China, inspections are completed at a provincial, not a national level. Every province has its own inspection bureau and the power to take any sample they wish and send it to any lab. Failure to achieve a published standard results in a citation. In contrast, the API employs a standardized process including sampling, communication, a chance to explain oneself and the opportunity for appeal. In China, there is no appeal. Wang also points out that GB does not recognize test severity or precision.
A Pennsylvania State University graduate with a Ph.D. Degree in Chemical Engineering, Wang asserts that China is no longer a follower market. “You can’t just pull things off the shelf anymore,” he says. Rather than simply customizing, lubricant manufacturers have to do product development. Creating a product specifically for China is an entirely different concept with amplified complexity.
[caption id="attachment_119749" align="alignright" width="300"] Oronite's Singapore additives plant.[/caption]
Every lubricant manufacturer understands the difficulty of crafting products for specifications that are still in development. Wang claims this is the new “game changer” in China — a need to plan ahead of time, to develop not just customize, and to anticipate. “If companies wait for a specification they do not get to help shape it — it’s too late,” he says. This approach is no different to elsewhere in the world. ILSAC GF-6 compliant products will probably become available despite an unknown official specification delivery timeframe. Chevron Oronite is already employing this method for the forthcoming D1-2019 and fuel economy specifications, says Wang.
Competition is heating up in the research and development space in China, with all roads leading to Shanghai. Appropriately resourced technical centres are mandatory to obtain first-hand information to provide input and lobby during the development process, and to tailor a product and make it work, says Wang. The majority of lubricant technology facilities are located just a few kilometres apart in Pudong in the outskirts of Shanghai — including Infineum, Oronite, Lubrizol and Afton Chemical. Multinationals and even local companies have their technical staff in Shanghai, says Wang. Proximity allows for close cooperation, though maintaining quality staff can be problematic, he suggests.
Current restrictions however prohibit the storage, blending or processing of anything more than small quantities of oil where these companies are located.
[caption id="attachment_119746" align="alignleft" width="300"] New Oronite Product and Technology setup in China includes local field test team working with global colleagues.[/caption]
The new heavy-duty diesel engine oil spec, D1, is planned for national release in 2019 and highlights China’s growing enthusiasm for tailor-made engine oil specifications to address the demands of the local market. Chevron Oronite is positioned for the addition of the new heavy-duty specification, he says.
On the other hand, the introduction of a new fuel economy test is a far bigger challenge, says Wang, despite the existence of ACEA Fuel Economy and API Resource Conserving criteria in current engine oil specifications.
China SAE is in the early stages of developing a fuel economy oil test standard for heavy-duty (HD) vehicles and passenger cars (PC). Because the fuel economy standard is simply a test — the HD and PC tests could easily become part of GB national standards. Further, Wang cites two major differences from the Sequence VID, an engine dynamometer test developed by ASTM International that measures a lubricant’s ability to improve the fuel economy of passenger cars and light-duty trucks for use in ILSAC GF-5. Firstly the fuel economy test does not include aging, and therefore FEI 2*; and secondly, it is likely to be less precise and will have a different response than the steady state like the VID. China is a single country with global complexity — and it seems China is adding further complexity to it. The added complexity will create problems, affirms Wang.
What does the future hold for fuels and lubricants in the multidimensional Chinese market? Wang says it is anyone’s guess but speculates the future is coming faster than any expert imagines. “We are so entrenched in the past we don’t see the future” and are at a real risk of being blindsided by traditional thinking that favours the status quo.