Is API CH-4 Headed for a Sunset?

So what does the EMA know that we don’t, and why would sunsetting CH-4 be beneficial?

First, here is some background. Diesel fuel contains sulfur, which is a characteristic of the original crude oil source and can still be present after refining. After combustion in the engine, the sulfur in fuel forms acids and particulates that are a primary contributor to air pollution and the cause of harmful corrosion in the engine.

Diesel fuel was uncontrolled insofar as sulfur content was concerned until 1993 when the United States Environmental Protection Agency imposed a 5,000 parts per million (0.5 percent) maximum for sulfur in all fuel. Before that, it ranged from about 0.5 percent to more than 1 percent sulfur. CH-4 was developed to provide protection when using 0.5 percent sulfur fuel. The current CK-4 category is designed primarily for ultra-low sulfur diesel fuel (15 ppm sulfur). There are significant advantages to ULSD over 0.5 percent sulfur fuel that include reduced deposit forming tendencies, reduced corrosion problems, cleaner exhaust and improved oxidation stability, among others. But these fuels come at a higher cost due to more extensive refining processes.

Currently, there are 296 API licenses referencing API CH-4 registered from all regions of the world. I need to point out that in some cases these licenses may represent oils registered under multiple service categories and universal oils. Overall, the point is that there are many oils meeting the API backward compatibility requirements for labeling.

How much of this category is sold worldwide? According to a contact with Kline & Co., CH-4 oils represented 21 percent of the global HDMO market in 2019. Interesting that 20 years after its debut, CH-4 is still an important part of the market. The chart below gives a more complete view of the world market.

As you can see, CH-4 is the largest seller by volume, and the latest categories are not the largest volumes represented. Why is this happening? Is it simply multiple labeling, or is there still a major need for CH-4 quality?

Let’s look at the EMA proposal to sunset the category in more detail. Here is what was presented at the Diesel Engine Oil Advisory Panel meeting held on March 4: CH-4 could be sunsetted because it isn’t needed any longer, and the needs of older engines can be met with CI-4 or CI-4 Plus. This should occur within the next year, which will allow time for API to announce the end of licensing and for engine manufacturers to educate their customers.

I can tell you that sunsetting a category may be easier said than done. When I was at Pennzoil, we had a secondary brand called Pennzoil Motor Oil. At a time when the reigning API passenger car engine oil category was SF, this oil met both gasoline and diesel engine oil categories API SC/CC. It was viewed by the sales force and most customers as a satisfactory oil and was inexpensive. 

Annual sales were a steady 500,000 to 1 million gallons per year. In the Pennzoil universe that was a minor volume, so we thought we’d streamline the mix of brands by eliminating Pennzoil Motor Oil. The cost of labels, packaging and marketing materials was important, and the operational headaches of maintaining an additional brand on the fill lines made the decision a logical choice.

When we announced to the sales people that it would not be available after a certain date, a howl went up that rivals the coyotes I can hear from my back patio! It didn’t take long for us to backtrack and instead decide to raise the price, thinking that customers didn’t want to pay more. However, the sales volume remained unchanged. 

Our next tactic was to rebrand Pennzoil with Z7 and use the Z7 pricing. It continued to sell at the same volume, confirming that customers don’t like change and will regard it with suspicion. It took several years before we could get the customers to stop asking for it and for the sales force to understand the need to sunset it.

Back to the DEOAP meeting. During the discussion, the additive industry (through the American Chemistry Council) indicated general support for the idea, but one member company pointed out that API CH-4 is still a viable category and is growing in the marketplace. For example, Brazil and Mexico have adopted API CH-4 as a minimum standard. The company agreed that upgrading the market is important but believed that one year was too fast. Instead, it proposed two years, which would allow oil marketers, additive companies and governmental agencies time to upgrade to API CI-4 and CI-4 Plus. It also pointed out that there may be testing protocols to be addressed.

One oil marketer noted that API CH-4 is probably not necessary for North America but is necessary in other parts of the world such as the Middle East, Southeast Asia, Africa and South America. The marketer wanted to know if it was possible to have API performance categories active in some parts of the world and not others and suggested that CH-4 could be sunsetted in North America and maintained in the rest of the world with periodic reviews of its viability.

What finally came out is that some companies are OK with CH-4 being sunsetted and others aren’t. Those in favor of the idea cite the upgrade as progress—an opportunity to move overall oil quality up. These companies are optimistic that change can benefit automakers, oil marketers and additive suppliers, not to mention customers.

Those with more concerns want to know why the sunsetting is necessary. They feel that CH-4 has served the industry well and a market still remains. As I noted above, CH-4 has the largest share of demand globally as of 2019. There is still a lot of old equipment out there, including 18-year-old vehicles. 

Further, oil formulators indicate that base oil quality in the form of API Group II has replaced much of the older Group I base oils in CH-4, effectively improving oil quality.

EMA responded to comments about existing category recommendations outside of the United States. They said they are pleased API categories are being used and thought it would be good to stay with the system but move all markets up to CI-4 or CI-4 Plus.

EMA said that some previous sunsetting actions were very abrupt, leaving OEMs with some hard explaining to do with customers. That is the reason for the one-year lead time. Others commented that some abrupt changes in other oil markets have resulted in an underground market for the old specification, often with dubious supporting information as well as some questionable “boosters” added to the oils. Several states actually have API category information embedded in law, and it could require some time to amend existing statutes.

Another part of the issue is that there may be a need to redefine some engine tests and limits. The Category Life Oversight Group will need to examine the particulars to be sure that a valid set of tests is available, including hardware, appropriate reference oils and test limits.

One oil marketer asked if EMA is ready to make CH-4 and all related OEM standards obsolete. EMA representatives said this is already happening.

Another oil marketer commented that some CH-4 customers are price sensitive and will not move to more expensive oil. Another comment was that old engines are still being manufactured for off-shore markets, but no OEM would or could corroborate that statement.

Others noted that uncontrolled or obsolete HDEO categories are unavoidable. For some oil marketers, the loss of API licensing could be a significant drag on their business. And of course, odds are that the owner of an older truck won’t see any value in moving up
to higher-priced CI-4 when CH-4 has served him well. I’ve received notes from many readers saying just that.

All of this is just a preamble to the hope that a more streamlined oil certification system can be developed. The next level of heavy-duty engine oil is already in the talking stage and will probably be required by 2027 or sooner. These programs are costly and time consuming, so we’ll be able to see some ideas soon. As Roseanne Rosanna Danna used to say on Saturday Night Live, “It’s always something.”

Industry consultant Steve Swedberg has over 40 years experience in lubricants, most notably with Pennzoil and Chevron Oronite. He is a longtime member of the American Chemical Society, ASTM International and SAE International, where he was chairman of Technical Committee 1 on automotive engine oils. He can be reached at steveswedberg@cox.net.