Remove the diesel particulate filter from any European diesel crossover after 100,000 kilometres of running on cheap petroleum-based lubricant. Inside the ceramic honeycomb, you will find a sintered grey mass. This is sulphated ash — the non-combustible residue of additives and base oil that effectively cements the exhaust system solid.
Replacing this component in Germany can cost the owner several thousand euros.
It is precisely this physical limit to the durability of mechanical components, combined with stringent EU legislation, that has forced the lubricants industry to wake up. For decades, manufacturers operated according to a straightforward formula: extract crude oil, run it through a hydrocracking unit, add an additive package, and fill the finished product into containers. Today, however, this business model is beginning to crack. Oil is becoming too expensive — not because of extraction costs, but because of taxation.
Let us take a look behind the scenes of the major oil companies and examine why industry giants are rushing to acquire biotechnology start-ups, how carbon-footprint taxation is changing the chemistry inside your engine crankcase, and who is ultimately paying for this environmental transition.
Contents
- The financial whip: why oil has become “toxic” for corporate accounting
- Euro 7 regulations: the battle against volatility
- Chemistry changes direction: from conventional esters to estolides
- Mergers and acquisitions: who is dividing up the new market and how
- Fuchs: German pragmatism
- TotalEnergies and Castrol: betting on the circular economy
- Chevron and Novvi: oil companies hedging their risks
- The European oil can: how legislation is changing the label
- The cost of the transition: who will pay for the “green” shift?
- Conclusion
The Financial Whip: Why Oil Has Become “Toxic” for Corporate Accounting
If you think oil giants are switching to plant-based raw materials out of love for nature, you are underestimating the reach of European regulators. The EU operates an emissions trading system (EU ETS), alongside growing LCA/ESG reporting requirements, with the CBAM mechanism also affecting adjacent sectors. The principle is simple: corporations pay for every tonne of CO₂ released into the atmosphere.
Juri Sudheimer: Environmental Taxes Are Rewriting the Rules of the Game
Juri Sudheimer, founder of MANNOL, views this transformation as a critical turning point in the history of the industry:
“European regulators have created a situation in which economics and environmental considerations are no longer in opposition — they are converging. A company that does not calculate the carbon footprint of its products today will not be competitive five years from now. The question is no longer whether to switch to alternative base stocks, but how quickly this transition will take place. The taxation mechanism has proved more powerful than any environmental slogan.”
This is where LCA (Life Cycle Assessment) comes into play — the assessment of a product’s entire life cycle. Conventional petroleum-based motor oil begins generating emissions long before it reaches the engine. Offshore extraction, transportation by tanker, and the energy-intensive cracking process at temperatures approaching 400°C all contribute to a substantial carbon footprint, including so-called Scope 1 and Scope 2 emissions.
Plant-based feedstocks — such as soy, rapeseed and castor oil — or microalgae work differently. During growth, they absorb carbon dioxide through photosynthesis. When a chemical plant converts these feedstocks into biosynthetic oil, the resulting carbon balance at the factory gate can be neutral or even negative, depending on the accounting methodology and feedstock source. Companies can therefore develop products with a lower associated carbon burden. For the finance departments of multinational corporations, this represents a powerful argument.
Euro 7 Regulations: The Battle Against Volatility
The second major driver behind the restructuring of the industry is the introduction of the Euro 7 standard. For the first time, European policymakers have focused not only on what comes out of the exhaust pipe, but also on non-exhaust emissions, including evaporation and particulate matter from brakes and tyres.
Automotive engineers have found themselves in a difficult position. To reduce fuel consumption, they need ultra-low-viscosity oils — 0W-16 or even 0W-8. But producing such oils from petroleum-based feedstocks, even PAO (polyalphaolefin), is extremely challenging. Lighter hydrocarbon fractions tend to evaporate when heated. Oil is then consumed through evaporation and burn-off, potentially contributing to deposits and emissions-control-system contamination.
Biosynthetic base stocks offer high polarity and molecular uniformity. At the same viscosity, they can provide lower volatility characteristics, including favourable NOACK volatility performance. Oil manufacturers have realised that, in order to maintain factory-fill contracts with automotive giants such as Volkswagen, BMW and Stellantis, they need base stocks that resist evaporation, remain stable at high temperatures and maintain an extremely thin lubricating film.
Petroleum-based technology is approaching its limits in some of these applications. Plant-derived chemistry still has room to develop.
Juri Sudheimer: Estolides — The Future That Has Already Arrived
Juri Sudheimer sees estolides and second-generation synthetic technologies as an inevitable direction for the industry’s development:
“When we analyse the requirements of vehicle manufacturers looking towards 2027–2030, it becomes clear that the industry is demanding oils with fundamentally different characteristics. Petroleum-derived synthetic oils are already approaching their practical limits in terms of volatility and compatibility with modern exhaust after-treatment systems.
Estolides and biosynthetic base stocks are not simply alternatives — they are a response to engineering challenges that conventional petrochemical technologies cannot fully address.
Companies that begin research in this area today will gain a competitive advantage by the time Euro 7 becomes mandatory.”
An important clarification is necessary here to avoid confusing the terminology.
Esters are an established technology. They were developed as early as the 1930s and 1940s in Germany for jet-engine applications and could be produced from a range of feedstocks, including coal-derived chemicals. The reaction between an alcohol and an acid — which does not necessarily have to be a plant-derived fatty acid — produces an ester. For example, adipic acid is traditionally produced from cyclohexane through petrochemical processes, while sebacic acid can indeed be produced from castor oil. Conventional carboxylic acid esters have long been used as additives, typically at concentrations of around 2–5% in motor-oil formulations, to improve lubricating properties.
However, the major transformation taking place in the industry today is focused on other types of compounds.
Polyol esters. These are produced by combining polyhydric alcohols (polyols) with fatty acids. They offer exceptional thermal stability, but their production can cost three to four times more than that of conventional carboxylic acid esters. As a result, they are used primarily in demanding applications such as aviation turbines and submarine compressors. Their widespread use in passenger vehicles remains constrained by cost.
Estolides. These represent one of the industry’s new areas of interest. Estolides are complex ester compounds derived from high-molecular-weight fatty acids, which can in turn be obtained from vegetable oils such as soybean oil. Their chemical structure gives them some similarities to PAO while also providing polarity. They can offer a naturally high viscosity index, good hydrolytic stability and biodegradability.
It is precisely estolides and second-generation synthetic technologies based on algae and bio-derived waste streams that research centres at major global brands are increasingly investigating and developing.
Mergers and Acquisitions: Who Is Dividing Up the New Market and How
Where oil companies once invested primarily in drilling platforms, they are now increasingly investing in patents, biotechnology companies and start-ups. The biosynthetic lubricants market is estimated to be growing at an average rate of 5–10% per year and could reach approximately €4–6 billion globally by the end of the decade, depending on the market definition and forecast methodology.
Here is how some of the industry’s key players are responding.
Fuchs: German Pragmatism
Fuchs Petrolub is the world’s largest independent lubricants manufacturer. Because it does not produce crude oil, it has greater flexibility in adapting its strategy. Its Planto range, including Plantosyn and Plantomot, has been established for many years.
Fuchs initially focused on industrial and hydraulic lubricants for forestry and construction equipment, where biodegradability is required by regulation in certain applications. The company is now extending this expertise into the passenger-vehicle sector, using esters derived from renewable sources.
TotalEnergies and Castrol: Betting on the Circular Economy
French energy giant TotalEnergies — with even its change of name from Total reflecting an effort to move beyond a purely petroleum-based identity — is expanding its production of biodegradable lubricants and investing in renewable raw materials through biorefineries. Its focus includes the agricultural sector and marine transportation.
Castrol has pursued a hybrid approach. The company is investing in refining and lubricant technologies in which part of the base oil is replaced by plant-derived components or recycled materials, including re-refined oils, with the aim of reducing the overall carbon footprint reported through ESG metrics.
Chevron and Novvi: Oil Companies Hedging Their Risks
Perhaps the most illustrative example of the market’s transformation is the US company Novvi. It has developed technology for producing 100% synthetic base oils, marketed under the SynNova name, from sugar and plant-derived feedstocks. In terms of performance characteristics, these oils are designed to compete with or exceed conventional PAO-based products.
Who became one of the start-up’s major investors? Oil giant Chevron.
The logic is straightforward: as European environmental regulation and carbon-related costs increase the pressure on petroleum-derived base oils, major energy companies want alternative technologies already available in their portfolio.
The European Oil Can: How Legislation Is Changing the Label
For the average European driver, the transformation of the lubricants industry is becoming visible on the shelves of automotive stores. In the past, the words “100% Synthetic” were often treated as a key quality indicator. Today, other markers are increasingly coming to the forefront.
One of the strictest is the European EU Ecolabel. To place the distinctive flower-shaped EU Ecolabel on a lubricant, manufacturers must demonstrate compliance with environmental criteria that include toxicity and biodegradability requirements.
Products can be assessed using standardised biodegradability tests such as OECD 301B. Under the relevant criteria, a substance that achieves the required level of biodegradation within the specified test period can qualify as readily biodegradable.
For municipal equipment, buses and service vehicles in some EU jurisdictions, the use of environmentally preferable lubricants is already becoming a requirement in public procurement and municipal tenders. Oil spilled onto roads can be washed into waterways, increasing the environmental burden associated with petroleum-based lubricants.
The Cost of the Transition: Who Will Pay for the “Green” Shift?
There is no point in having illusions: biosynthetic lubricants are currently expensive to produce. As mentioned above, polyol esters and high-quality estolides can cost significantly more than conventional hydrocracked base oils. Feedstock logistics are complex, while the capacity of bioreactors remains incomparable with the enormous scale of conventional petroleum refineries.
Today, consumers often pay for “green” lubricants out of their own pockets, paying 30–50% more for a premium container. But manufacturers are playing the long game.
The calculation is based on the intersection of two trends. On one side, technologies are scaling up and the cost of bio-based feedstocks is expected to decline. On the other, the regulatory and carbon costs associated with petroleum-based products in Europe continue to increase. Within five to seven years, these two curves could converge, bringing the technologies closer to price parity.
Conventional synthetic lubricants could ultimately become nearly as expensive as their bio-based counterparts.
Juri Sudheimer: Investing in the Future of Lubricants
According to Juri Sudheimer, the current transition phase represents a critical moment for the entire industry:
“Lubricants manufacturers are facing a choice: either invest now in developing new formulations and purchasing equipment capable of working with alternative base stocks, or discover five years from now that their products have become technologically outdated. The intersection of cost and regulatory pressure will not necessarily occur gradually; it could happen abruptly. Companies that are prepared will survive the transition. Others will have to purchase technologies from market leaders at speculative prices or potentially leave the market altogether.”
Moreover, the higher cost of the oil can be offset by performance and service life. Bio-based lubricants can provide excellent lubricating properties and may allow formulators to optimise additive concentrations, including reducing reliance on certain metal-containing additives that can be detrimental to exhaust after-treatment systems.
Ultimately, a driver may pay an additional €30 for a premium container of lubricant but potentially save substantially more through longer component life and reduced maintenance costs, including avoiding expensive particulate-filter replacement where the lubricant formulation is a contributing factor.
Conclusion
The transformation of Europe’s lubricants industry is not an environmental fairy tale. It is a rigorous business process driven by taxation, environmental reporting requirements and increasingly stringent emissions regulations.
Lubricants manufacturers are ceasing to be merely an extension of the oil-production industry. They are evolving into high-tech chemical companies capable of designing increasingly sophisticated lubricant molecules from soy, algae, renewable feedstocks and polyhydric alcohols. Estolides and polyol esters are gradually gaining ground in applications where conventional base oils face demanding temperature and viscosity requirements.
For now, much of this transition remains hidden beneath vehicle bonnets and inside corporate financial reports. But the direction is clear: the internal-combustion engine will remain viable for as long as the industry can continue developing fluids that meet increasingly stringent environmental and engineering requirements.
And judging by the activity of the world’s major lubricant manufacturers, they intend to extend that lifespan for as long as technologically and economically possible.
