Citing concerns that it was preparing an unfair playing field, the American Petroleum Institute said Friday that it will postpone the start of commercial licensing for the SM category of passenger car motor oils until Nov. 30, a delay of two months.
In a letter to members of its Lubricants Committee, the institute suggested that it acted at least in part because of complaints that not all passenger car motor oil marketers could obtain approvals needed to offer SM oils by Sept. 30. The letter implied that the organization also worried about the possibility of legal action, which had been threatened by the Independent Lubricant Manufacturers Association.
The delay was commended by some in the industry and criticized by others. Proponents argued that the later start would give big and small companies equal chance to begin selling the new oils at the same time. Critics said it will undo work and spending that they have done to meet the early date, and that it hurts the integrity of the process for developing “S” specifications.
SM is the companion category to the GF-4 standard issued earlier this year by the International Lubricant Standardization and Approval Committee. Passenger car motor oils certified to the latest “S” category are licensed to display API’s donut trademark, designating oils that meet the latest industry standards. The institute licenses its other trademark – the starburst – to products meeting the latest GF standard, which has the same or similar requirements but is also meant to identify oils that conserve fuel.
With previous upgrades, API’s Lubricants Committee has generally allowed a six- to nine-month period between adoption of “S” categories and the start of commercial licensing. That period is meant to allow additive companies and oil marketers a chance to obtain necessary approvals.
When the committee voted to approve SM on May 30, however, the proposal called for a testing period of just four months. The specification and schedule passed with eight votes in favor, three opposed and two abstentions. Proponents said they wanted to shorten the time period in order to minimize the lag from licensing of GF-4 oils, which begins Sunday. Most marketers of 10W-30, 5W- and 0W engine oils display both API trademarks together.
But opponents complained during and after the May 30 meeting that four months did not give additive companies enough time to complete tests for the base oil and additive combinations sought by small and independent oil marketers. Larger marketers would get their approvals first, these opponents said, giving them a competitive advantage when licensing of SM began.
In early June, ILMA sent API a letter stating it would consider legal action if the institute followed through on the four-month testing period. The institute then asked the Lubricants Committee to vote again on the time period. In Friday’s letter, the institute stated that the schedule passed again but that it decided nonetheless to postpone licensing.
“Based on information that has been received by API from various sources and the recommendation of the API Office of General Counsel, we believe that a delay … is warranted,” Director of Certificate Programs John D. Modine wrote. A spokeswoman for the institute told Lube Report yesterday that it would not comment further.
ILMA was among those that welcomed the delay.
“The consensus process for engine oils should be fair to all licensees, and ILMA agrees that the additional time will help independents respond to their customers,” Executive Director Celeste Powers said yesterday in an article in the association’s online newsletter, Flashpoint.
Committee member Tom Cousineau, of Afton Chemical (formerly Ethyl Petroleum Additives), concurred. “For the majority of customers [oil marketers] we need more time,” he said. “Six months will give an equal opportunity for everyone to get the approvals they need.”
Companies that favored the four-month testing period disagreed with the reversal.
“We wanted to minimize the time difference between licensing for GF-4 and SM,” said Valvoline’s Thom Smith, also a committee member. “That in-between period drives people nuts, because companies prefer to switch to both standards at the same time.
“When you have a prolonged difference in the starting dates, you get in to all these logistical and packaging issues. Do you go to the trouble to use labels that have one trademark but not the other for a few months? Or do you put off switching to the standard that is licensed first in order to coincide with licensing for the second?”
Smith said Valvoline is considering whether it has any recourse to the delay. He and other proponents of the four-month testing period said companies that proceeded with plans to offer SM products on Sept. 30 will now have to scrap some of their work.
Some members said they were upset that API postponed SM without first consulting with the committee and complained that the institute appeared to have caved in under ILMA’s pressure. They warned that the action could set a precedent undermining the Lubricant Committee’s process.
API’s letter noted that companies with oils tested as meeting the requirements of SM can be marketed as such before Nov. 30. They simply cannot display the category inside the donut trademark until that date.