Reproduction of any material whether by photocopying or storing in any medium by electronic meansor otherwise is prohibited without prior written consent of Infineum International Limited.

© Copyright INFINEUM INTERNATIONAL LIMITED 2007. All rights reserved

See the legal disclaimer notice on www.Infineum.com

"INFINEUM", "DOBANAX", "PARATAC", "SYNACTO", "VEKTRON", and the corporate mark comprising the interlocking ripple device are trademarks ofInfineum International Ltd. “VISTONE” is a trademark of Exxon Mobil Corporation used under licence

by Infineum International Limited.

Future Trends and ChallengesFuture Trends and Challengesinin Engine LubricantsEngine Lubricants

Dr. Jai G. BansalDr. Jai G. BansalGlobal Technology Advisor - Crankcase Lubricants

Infineum International Limited

IntroductionIntroduction

The automotive and heavy duty diesel industries aregoing through a period of rapid change

More hardware changes in the pipeline than in last 50 years

The lubricant industry is changing accordingly

The purpose of this presentation is to discuss:The key drivers behind this changeResulting challenges for the lubricant/additive industryHow the lubricant/additive industry is responding to thesechallenges

OutlineOutline

Introduction

Industry Drivers and Consequences

Key Trends and Challenges in Lubricant Formulations

Environment

Cost ofOwnership Globalization

Shortage ofNatural Resources

Tougher HSERegulations

EmissionRegulations

ExtendedDrain

FuelEconomy

AlternateFuels

Competitionat OEMs

CustomerSatisfaction

Industry Drivers and ConsequencesIndustry Drivers and Consequences

……Industry Drivers and ConsequencesIndustry Drivers and Consequences

GasolineDirect

Injection

Down-sizing

CatalystConverterDurability

Turbocharging

On-board oilmonitoring

Dieselcommonrail

Advancedmaterials and

surfacetreatments

EGRRetardedtiming

Variable valveactuation

ACERT TMDPF

SCR

Rapidly ChangingRapidly ChangingLubricant RequirementsLubricant Requirements

1. Emissions2. Extended Drain3. Fuel Economy4. Alternate Fuels

Key Trends and Challenges in LubricantKey Trends and Challenges in LubricantFormulationsFormulations

Source: Purem

1. Emissions1. Emissions

Diesel Emission StandardsDiesel Emission Standards

Emission Control StrategiesEmission Control Strategies

Approaches vary with OEMs but involve somecombination of

Exhaust Gas Recirculation (EGR) – without or with externalcoolingDiesel Particulate Filter (DPF)Selective Catalyst Reduction (SCR)Caterpillar use proprietary ACERTTM system

Different approaches lead to specific and fragmentedlubricant needs

Nevertheless certain trends are common to most dieselengine lubricants:

Higher soot loading in the oil due to EGRRestrictions on SAPS (Sulphated Ash, Phosphorus andSulphur) to protect after-treatment devices

Retarded Timing

1988

API CE

1991

CF-4

1994

CG-4

1998

CH-4

2003

CI-4

Plus

2007

CJ-4

Externally cooled EGR

So

ot

inO

il,w

t%

1.0

3.0

4.0

5.0

6.0

2.0

Evolution of Soot Requirements in NAEvolution of Soot Requirements in NA ~6 lb of sootin typical oil

sump!

Less surfaceactive sootfrom cooled

EGR

Soot from Cooled EGR engines is unresponsiveSoot from Cooled EGR engines is unresponsiveto conventional dispersantsto conventional dispersants……stepstep--outouttechnologies requiredtechnologies required

0 2 4 6 8 10

Soot in Oil, Wt%

Vis

Inc

rea

se

New

TechnologyConventional

Dispersant

NormalDosage

2 X

Normal Dosage

Restricted SAPS EnvironmentRestricted SAPS Environment

Sources of SAPSSulphated Ash – Metal detergents, ZDDP antiwear additivesPhosphorus – ZDDP antiwear additivesSulphur – ZDDP, certain metal detergents, additive diluents,basestock

Phosphorus – The industry is fully cognizant of theimpact of “P” loading on catalyst efficiency in gasolinepowered vehicles

Long term trend is to reduced ZDDP in the oilExtent of reduction will be determined by engine durabilitySignificant reductions beyond current levels will requiredevelopment of new phos-free anti-wear technologies

Sulphur – With “S” largely eliminated from diesel fuel indeveloped markets, and the widespread use of Group IIand III basestocks, focus on sulphur content is now onthe additive systems

Metal detergents are metallic salts of organic materialssuch as sulphonate, phenate and salicylate

Some also contain metallic carbonate core to impart basicity oracid neutralization capability to the oilCommon metals are calcium and magnesium

Detergents play an important role in providing essentialpiston cleanliness and acid neutralization capability

Correct choice can also play a role in reducing ash and sulphur

Role of Metal Detergents in SAPS ConstrainedRole of Metal Detergents in SAPS ConstrainedEnvironmentEnvironment

Detergent ComparisonDetergent Comparison

Specially tailored salicylates for crankcase lubricants canoffer significant advantages, especially in extended drain

and SAPS constrained applications

Sulphonate Phenate Salicylate

Piston Cleanliness

Top No Yes Yes

Bottom Yes No Yes

Rust Control Yes No Yes

Antioxidancy No Yes Yes

Sulphur - Free No No Yes

The Struggle to Reduce Ash : Calcium versus MagnesiumThe Struggle to Reduce Ash : Calcium versus Magnesium

TBN Contribution

AS

H,w

t%Calcium

Detergent

Magnesium

Detergent

Lower Ash at

equal TBN

• Existing magnesium detergents can play an important rolein reducing ash content in the oil

• However, large step-change reductions in ash from thecurrent levels will require development of non-metallicdetergent and TBN systems

Extended drain oils have broad appeal to the lubricantindustry

Optimum use of natural resourcesCost of ownership - reduced downtime for fleet operators,reduced cost of disposalMarketing feature for OEMs

Drain intervals are in part constrained byEmission control systems – soot loading in EGR engines, DPFConcerns about engine durability

Key enablersHigh quality basestocks – Group III, conventional as well asvery high VI Group III’s (eg, from GTL)Advanced additive technologies such as salicylate detergents,enhanced low S/P anti-wear and new antioxidant technologiesInterestingly, viscosity modifiers also play key role – a factgenerally not well understood in the industry

2. Extended Drain2. Extended Drain

Role of Viscosity ModifiersRole of Viscosity Modifiers

Basic rule of lubrication: If the engine starts, OilIf the engine starts, Oilmust pumpmust pump

Not just when the oil is fresh but all through its life in theengine

Oils formulated with certain viscosity modifiers canexperience serious loss of pumpability at lowtemperatures due to ageing in the engine

For such oils, extending the time between oil changescan dramatically increase the risk of lubrication failure

Careful selection of VM is critically important inextended drain applications

Oil AOil A(VM(VM ””AA””, Premium additive system, Group III), Premium additive system, Group III)

0

100

200

300

400

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Time from Start, Min

Oil

Pre

ss

ure

,K

Pa

Fresh After 10K Miles

Little change after 10K milesof service

Oil BOil B(VM(VM ““BB””, Premium additive system, Group III), Premium additive system, Group III)

0

100

200

300

400

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Time from Start, Min

Oil

Pre

ss

ure

,K

Pa

Catastrophic loss ofperformance with age

Fresh

After 8K Miles

Fuel efficiency has been an important consideration forthe vehicle manufactures for quite some time

Escalating fuel costs in recent times have further raisedthe profile of FE in the automotive as well as the heavyduty diesel engine industry

Large share of the FE gains will accrue frominnovations in hardware designs

However, lubricants can also play an important role inminimizing energy losses in the engine and, indeed theentire drive train

3. Fuel Economy3. Fuel Economy

BoundaryFriction

RheologicalLosses

In-ServiceRetention

Fuel Economy TriangleFuel Economy Triangle

Real FE gains in engine lubricants will involve allReal FE gains in engine lubricants will involve allthree corners of the trianglethree corners of the triangle

StepStep--out Reduction in Boundary Friction isout Reduction in Boundary Friction isAchievable with Advanced Additive TechnologiesAchievable with Advanced Additive Technologies

0.08

0.10

0.12

0.14

0 100 200 300

Moly in Oil, ppm

Co

eff

icie

nt

of

Fri

cti

on

Conventional Moly

Technologies

Advanced Moly

Technology

However, evolving engine designs pose newHowever, evolving engine designs pose newchallengeschallenges

Advanced SurfaceAdvanced SurfaceTreatment / CoatingsTreatment / Coatings

Low FrictionLow FrictionEnginesEngines

Reduced impactReduced impactof frictionof friction

modifiers onmodifiers onfuel economyfuel economy

CompatibilityCompatibilitybetween frictionbetween frictionmodifiers andmodifiers and

surfacesurfacecoatings?coatings?

Growth of Light Viscosity Grades

0

50

100

150

200

250

300

350

400

1985

1995

2004

2006

2012

*

Millio

nG

allo

ns

RheologyRheology -- Low Viscosity LubricantsLow Viscosity Lubricants

Low viscosity lubricants are becoming an increasinglyimportant element in the race for higher FE

SAE 10W-30

SAE 5W-30

SAE 5W-20

For gasoline engines,For gasoline engines,SAE 0WSAE 0W--20 are not20 are notfar awayfar away

For HD dieselFor HD dieselengines, SAE 5Wengines, SAE 5W--3030and 5Wand 5W--40 synthetic40 syntheticoils are starting tooils are starting togain marketgain marketacceptanceacceptance

Source: NPRA * Infineum estimate

Potential Implications of Low ViscosityPotential Implications of Low Viscosity

Viscosity * Speed

Contact Pressure

Fri

cti

on

Hydrodynamic

Lubrication

Mix

ed

Lu

bri

ca

tio

n

Bo

un

da

ry

Lu

bri

ca

tio

n

ViscosityViscosity

Wear,Wear,friction,friction,

evaporationevaporation

Low Viscosity LubesLow Viscosity Lubes -- Challenges andChallenges and OpportunitiesOpportunities

To date, formulation challenges associated with wear inlighter viscosity grades have been overcome

Further reductions in viscosity will need carefulattention both from engine designers and oilformulators

Conventional ZDDP anti-wear technology are unlikely tooffer much help

Treat rate limited by phosphorus constraintsMore aggressive ZDDPhigher friction reduced FE

Low/zero phosphorus antiwear technologies are likelyemerge in near future

Such technologies will be expensive but will provide very highvalue if the can protect engines while minimizing friction at thehardware interface

……Challenges and OpportunitiesChallenges and Opportunities

Careful attention will be required from engine designersto ensure that FE gains from the reduced viscosity arenot wiped out by the resulting increase in friction

Opportunity for friction modifiers such as the advanced molyadditive systems to play a bigger role?

Higher volatility will result in oil thickening over time,leading to reduced FE

Narrow cut, high VI basestocks will play an important role inminimizing the evaporative losses

Fuel Economy RetentionFuel Economy Retention

Lubricants have to deliver FE performance throughouttheir life in the engine, not just when they are fresh

Formulation leversDurable friction modifiersAntiwear systemLow volatilityAntioxidantsDispersants – particularly for soot induced viscosity control inHD diesel engine oils

Group III basestocks will play a major role in FEretention due to their

low volatilitysuperior antioxidant responsehigh viscosity index

4. Alternate Fuels4. Alternate Fuels

Use of biomass derived fuels to extend conventionalfuels is gaining momentum

Renewable energy sourceSecurity of energy supplyOften price supported through government incentives

Gasoline – Use of ethanol is growing, particularly in NA10% ethanol has been used as oxygenate in gasoline for longtimeRecently E85 (85% ethanol) has been gathering momentumSome Brazil experience suggests that E85 will require oilformulators to address issues such as rust and emulsion

Diesel – Issues are much bigger here compared togasoline because of the wide chemical and physicalvariety of alternatives being proposed

BioBio--DieselDiesel

Derived from renewable resources, the use of FAME(Fatty Acid Methyl Ester) in diesel engines has beenspreading across the globe

FAME is generally blended with petroleum dieselDesignated “BX”, X = % of FAME in blendEG, B5 = 5% FAME, 95% petroleum based diesel

Positions of HD diesel engine OEMs vary widelyB5 is generally accepted provided the FAME meets US or EUfuels specsSome OEMs allow B20 and B30 for specific engines but mayrequire additional monitoring

Use of B100 is rare but does exist – mainly in captivefleets

WhatWhat’’s in a FAME?s in a FAME?

FAME is manufactured from a variety of vegetable andanimal sources

RME - Rapeseed methyl esterSME - Soybean methyl esterPME - Palm oil methyl ester etc... etc...

The use of bio-diesel has a number of potential issuesDiversity of sources Variable qualityUnsaturation in the backboneoxidationPresence of wax or wax-like structures low temperaturefluidityBoiling range is typical higher than petroleum dieselaccumulation of unburnt or partially burnt FAME in the oilDiversion of food crops to fuelRenewable but may be not sustainable

Effect on Lubricant PerformanceEffect on Lubricant Performance

Two oil quality levels, standard and top tier, were testedwith varying levels of bio-diesel contamination for

corrosion (Cummins HTCBT test)

oxidation (GFC oxidation test)

deposits (TEOST MHT-4 test)

Low temperature fluidity

Copper and Lead Corrosion (HTCBT)Copper and Lead Corrosion (HTCBT)

Copper Lead

0

50

100

150

Neat 10%

B0

10%

B50

10%

B100

Co

pp

er,

pp

m

Standard

Top Tier 1

0

500

1000

1500

2000

Neat 10%

B0

10%

B50

10%

B100

Le

ad

,p

pm

Standard

Top Tier 1

Standard quality lubricants may be unsuitable forStandard quality lubricants may be unsuitable forbiobio--diesel; some top tier oils appear to be OKdiesel; some top tier oils appear to be OK

Oxidation Stability (GFC)Oxidation Stability (GFC)

0

10

20

30

40

Neat 10%

B0

10%

B50

10%

B100

Vis

Inc

rea

se

,c

St

Standard

Top Tier 2

0

2

4

6

8

Neat 10%

B0

10%

B50

10%

B100T

ota

lA

cid

Nu

mb

er,

mg

KO

H/g

Standard

Top Tier 2

Viscosity Increase Total Acid Number

More potent antioxidants in top tier lubricants areMore potent antioxidants in top tier lubricants areable to compensate for the oxidative weakness ofable to compensate for the oxidative weakness of

biobio--dieseldiesel

Deposits (MHTDeposits (MHT--4)4)

0

10

20

30

Neat 10%

B0

10%

B50

10%

B100

De

po

sit

,m

gStandard

Top Tier 2

Again, top tier lubricants fair much better thanAgain, top tier lubricants fair much better thanstandard quality lubricantsstandard quality lubricants

Low Temperature FluidityLow Temperature Fluidity

Two oils based on a top tier SAE 5W-40 technologyformulated with a Group III basestock

Oils similar in all respects except viscosity modifiers, A and B

Oils were doped with bio-diesels from different sources

Low temperature pumpability measured with the MRV-TP1 test

Yield stress is one of the two parameters measured inthis test

Yield stress formation of network structures = “congealedoil”Presence of yield stress indicates risk of lubrication failure due“air binding” - higher the yield stress, greater the risk

NeatLube

10%B50

10%B100

10%B50

10%B100

10%B50

10%B100

SEVERE

MEDIUM

LOW

NIL

* As measured by the yield stress in the MRV-TP1 test

RAPESEED PALM SOY BEAN

RIS

KO

FL

UB

RIC

AT

ION

FA

ILU

RE

*

Risk of Lubrication FailureRisk of Lubrication Failure

SomeSome VMsVMs may be incompatible with biomay be incompatible with bio--dieseldiesel

A A A A

A

A AB

B

B B

B

B

B

Summary and ConclusionsSummary and Conclusions

As the needs and expectations of the engine OEMs andthe lubrication industry are changing, the additiveindustry is rapidly adapting to the changes around it.

Evolutionary approaches will continue to play a role inlubricant formulations of the future

However, real step-out changes in the additivetechnologies are taking place to address the longerterm needs of the industry

Such changes will affect not just one or two classes ofadditives, they will affect almost every major type ofadditive component used in oil formulations

……Summary and ConclusionsSummary and Conclusions

To use the orchestra analogy – we are not just changingthe string or the brass section, we are slowly but surelychanging the entire orchestra!

These are challenging times for everyone in the valuechain – OEMs, oil marketers and additive suppliers

Passion for innovation and perseverance will be keyassets in this environment