Brazil base oil demand trend shows groups II and III growing

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Brazil base oil demand trend

Brazil base oil demand trend – Demand for group II base oil should grow at a CAGR of 6.3% and group III basics at 4.8%, according to an estimate adopted by Iconic Base Oil, presented by its director Marcelo Guimarães in the last ICIS Panamerican Conference 2023, in New Jersey – USA. According to him, there is still an “avenue and opportunity for upgrades in the market that will positively impact the base oil matrix in Brazil.

Marcelo highlighted that this opportunity, in a way, is not exclusive to the Brazilian market. “The volume of high-quality oils needed to meet the requirements of modern engines sold to the market is not yet compatible with the number of new vehicles on the market, and this is expected to change. The important thing is that we have all the necessary resources to support this movement, such as additive technology and availability of quality base oils”, said the executive.

Some points that also require a lot of attention and careful analysis are issues related to logistics and tax management, due to the large distances between cities in the country and different tax regimes in the states of the federation.

Another important point presented by Marcelo Guimarães at the ICIS event was the resilience characteristic of internal combustion engine (ICE) technology, mainly in Brazil, due to the use of ethanol. When the focus is on CO2 emissions from exhaust gases, ICE flex engines with ethanol have an average of 37 kg of CO2 equivalent per 240 km, while a battery electric engine (BEV) would produce 54 kg of CO2 equivalent per 240 km .

“Sustainability is not the main cause for electrification. Competitiveness, technology and/or customer satisfaction of new entrants to the automobile industry are the most important things. In Brazil, we are advanced in the use of renewables in both the energy and electrical matrix when compared to other markets. The Brazilian Market is an open door for those who want to diversify risks” concluded Marcelo.