This post is a synopsis of the history and the current status of the GF-4/SM development and approval process. In the interest of brevity this paper will only deal with the high points and relevant activities. Please note that this paper is based on the beliefs of the North American Lubricants Company and its executives and is just one view of the situation. We encourage all parties to investigate this market dynamic through all means possible and form their own decisions as to the status of the program and the impact on their business.
GF-4/SM Motor Oils
In 2001 the automakers under the umbrella of ILSAC began working on a program to quickly develop and implement a new category of oils to be marketed under the GF-4 banner. These oils as originally proposed were radically different then anything that was currently being sold in the marketplace. They were being designed to handle a number of issues but the driving factors were emission system protection and longevity as well as fuel economy.
The initial proposal by the automakers was for GF-4 oil to be in the market by mid-year 2003 with Sulfur and Phosphorous maximums of .05 percent. This Sulfur/Phosphorus requirement was put in to assist the automakers in their efforts to meet the new EPA’s Tier 2 Bin 5 0.07gm/mile NOx 120k mile emission and catalytic converter standard by reducing these suspected catalytic converter poisons.
The potential problems with Sulfur and Phosphorous reduced to the .05 percent levels are in the areas of wear protection especially when you put these oils in pre-2004 automobiles.
In addition to the chemical impacts on wear as identified above, the automakers were looking at reducing the viscosity of the oils they recommended to 0WXX levels which also would impact wear protection. This viscosity change was an effort by the automakers to improve their overall corporate fuel economies.
The two major concerns around these intended changes were back-fill-capability and product cost. The initial industry beliefs were that you would not be able to back-fill this product into older vehicles and the cost of these new oils could increase by several dollars per gallon when compared to the current GF-3/SL products. It was felt these substantial cost increases would be a result of new additive technologies needed at these Sulfur/Phosphorus levels and the need to use more expensive base oils such as group II, II+ and group III base oils and the potential for short supply of these premium base oils.
Since that time there has been very effective involvement in this process by AOCA and ILMA as well as most Oil Companies, the EPA and others. The end result is these various groups have been able to negotiate a number of positive changes to the proposed GF-4 category and the AOCA played the major role in delaying the implementation of GF-4 motor oils by one year.
So, where is the GF-4/SM process today?
It appears GF-4 products will finally be available for licensing on July 31, 2004 with the current licenses for GF-3 products to be available for use through April 30, 2005. (The reason I say it appears is that AOCA, ILMA and the automakers are still involved in discussions with the EPA on product availability and product education of the consumer)
As a result of AOCA’s outstanding work, it also appears that the EPA’s Certification and Compliance Division will require that the automakers and possibly the oil companies develop and implement a program of promotion and education about GF-4 oils and the needs for the same. This program will very likely be aimed at both installers and consumers. An important element of this promotion and education program will likely be some form of documentation from the automakers, that the installer can give to the consumer explaining why they need to use the more expensive GF-4 oils in their cars. The idea is to take the burden of explanation off of the installer and to alleviate concerns of motorist that the installer is just trying to sell them more expensive oil.
GF-4 products will have Sulfur and Phosphorus maximums that are lower than GF-3/SL oils but that are higher at 0.08 maximum (0.06 minimum) for Phosphorus than the automakers originally wanted. Additionally, the automakers also gave some on Sulfur agreeing to accept 0.07 for 10WXX grades but staying with the requested 0.05 for 0WXX and 5WXX grades.
The cost increase for a GF-4 product when compared to a GF-3/SL product should be less then 50 cents per gallon. The reason for these smaller than feared cost increases are the changes in the automakers requirements for the products and the ability of the additive companies to formulate GF-4 products with a substantial amount of premium group I base oils for the 10W30 viscosity and smaller amounts for the 5W30 viscosity oil. This base oil breakthrough allows the use of lower priced base oils and takes significant pressure off of the group II base oil supply situation.
We believe the product will still enter the market place with performance questions and unknowns relative to it suitability in older (pre 1996 especially) automobiles.
We also believe many of our customers will maintain the GF-3/SL product as their main line bulk motor oil for at least the next year, filling their needs for GF-4 products from quart bottles or drums.
Those are the issues revolving around GF-4 that appear to be relatively clear in where they are going. However, there is still one very big question and that is will API’s new SM category align with the GF-4 products or will they break their historical position of alignment and take SM oils a different direction. Obviously the automakers want them to align but there is significant resistance from the Oil Companies through API to accept all of the ILSAC GF-4 requirements for SM oils. If the Oil Companies have their way, they will retain the right to manufacture oil that meets many of the GF-4 requirements yet deviates in the areas of Sulfur and Phosphorus content. The oil companies want to set SM oil requirements at 0.10 maximum for Phosphorus versus the GF-4 maximum of 0.08 and Sulfur maximums of 0.1% versus the GF-4 maximums of 0.07% for 10WXX oils and 0.05% for 0WXX and 5WXX oils.
The oil companies argue that they sell oil in many countries around the world where the GF-4 Sulfur and Phosphorus levels are not required and where there are significant differences in base oil quality and in vehicle and customer requirements. The automakers response is their cars go many places around the world, they need consistency and they want GF-4 oils to be available everywhere. The automakers are threatening to place language in their owners’ manuals recommending against the use of SM motor oils unless they also contain the Starburst.
The API’s position on SM requirements should be better defined after their mid-March ballot of their members. At last count the API’s members were leaning toward SM oil that deviates from the historical position of aligning the API’s performance requirements with the ILSAC GF performance requirements.
We hope this paper proves helpful in the understanding of the GF-4 process and current status.