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and enhance quality control. For example, increasing installations of advanced industrial gearboxes in the CNC (Computer Numerical Control) machines and hydraulic presses are spurring the demand for premium gear oils that offer enhanced thermal stability and oxidation resistance.
Another growth force for lubricant demand is going to be the power generation and transmission sector. Power generation capacities are growing driven by the exponential growth in the demand for electricity arising from mobility electrification and growing data center markets, with the strongest growth anticipated in Asia and Europe. Asia’s demand for industrial lubricants in power generation dwarfs that of other regions, primarily due to its massive scale of industrialisation, population, and energy consumption. Asian countries such as China and India are rapidly expanding their power generation capacities to meet growing industrial and residential energy needs. China initiated the construction of 94.5 gigawatts of coal-fired power plants in 2024, marking the highest annual increase since 2015; and India is undertaking significant renewable energy projects, such as the Gujarat Hybrid Renewable Energy Park. This is anticipated to generate in the region large volumetric demand for process oils, industrial engine oils, and turbine and circulating oils, which are critical fluids for power generation and transmission.
The European power sector, on the other hand, is undergoing an accelerated transition from fossil fuels to renewable energy generation. European countries together consume one quarter of global demand
for industrial lubricants used in power generation and transmission sector, indicative of its mature and diverse energy landscape. The region’s commitment to sustainability, such as the REPowerEU plan and the renewable energy directive, are set to cause changes in industrial lubricant demand in the region. Transition towards renewable power generation sources, such as wind and solar, will generate demand for high-performance, environmentally friendly stationary hydraulic fluids and industrial gear oils. However, the demand for turbine oils will marginally reduce over the medium-term period due to reduction in coal-based power generation.
On a global level, power transmission systems are projected to experience substantial growth driven by significant investments in expanding transmission infrastructure to meet the growing energy demand and to support the integration of renewable energy sources. This is expected to foster a continuous demand growth for process oils that are used in transformer and electrical applications.
In fact, process oils are set for growth in the coming years in more than one application – a prominent one being the rubber, plastic moulding, and chemicals sector. Process oils are consumed in the rubber, plastics moulding, and chemicals industries for manufacturing tyres, pharmaceuticals, cosmetics, and other plastic. The Asian region stands out with the highest process oil demand as the region has a vast production of several chemicals, pharmaceuticals, rubber and rubber products. Several investments are being made in the region to set up new rubber and
Figure 1: Global demand for industrial oils from 2015 and projected up to 2033.
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LUBE MAGAZINE NO.186 APRIL 2025
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