Diesel Exhaust Fluid

Imagine a service that 5 percent or more of your customers will need in coming years, a service that will likely be fairly synchronized with oil change intervals and a service whose profit potential is substantial. Think no such animal exists? Well, it may not be widespread yet, but diesel exhaust fluid (DEF) is a service likely to be found at more and more fast lubes in coming years.

All diesel-powered passenger and commercial vehicles produced after January 1 of this year are required to meet new, lower nitrous oxide (NOx) emissions standards set forth by the U.S. EPA. DEF — a chemical compound similar to urea — used in conjunction with selective catalytic reduction (SCR) technology is the most effective and safest means by which many OEMs are meeting the emissions mandate.

The SCR process injects DEF as an aqueous solution into the exhaust system, where a catalyst helps the DEF react with the NOx in the exhaust gases, converting the NOx to nitrogen and water vapor, harmless gases that are then released into the environment. While most vehicles that use SCR/DEF technology are heavy- and medium-duty vehicles, a few manufacturers will use SCR/DEF technology in light-duty pickup trucks and even some passenger vehicles. Most notably, Mercedes already sells a few diesel-powered vehicles that use SCR/DEF technology to clean exhaust gases. Vehicles equipped with SCR/DEF systems emit up to 90 percent fewer emissions than current diesel engines.

Manufacturers are turning to SCR/DEF technology because of the fuel economy benefit, which can be 5 percent or more compared with other emissions-control systems. With U.S. fuel emissions standards set to increase dramatically in coming years, lube operators can expect to see even more automakers adopting the technology. The Engine Manufacturers Association has estimated initial demand for DEF at 50 million gallons in 2010, rising to 750 gallons by 2015 and 1.3 billion gallons in 2019.

Fast lube operators report that around 8 percent of the vehicles they service are diesel powered. Assuming more and more diesel vehicles adopt DEF technology, it’s likely that within the next decade as much as 5 percent of customers could need the service.

For light-duty and passenger vehicles, DEF will likely be installed in a fashion similar to windshield washer fluid. That is, the typical light-duty or passenger vehicle will likely have a one- or two-gallon tank of DEF that, based on common usage rates, may need to be topped off every 5,000 to 7,000 miles — a perfect complement to an oil change for these vehicles. Though drivers will be able to top off DEF tanks by themselves (as most heavy-duty truck drivers are expected to do), many consumers will depend on auto service facilities like fast lubes to do the task for them.

Currently, DEF sells for around $9 per gallon, though the price is expected to decrease in coming years as supply increases. However, a fast lube that charges $20-$25 to top off a one-gallon DEF tank, and that eventually sells the service to 5 percent of customers, could generate income of $9,000 or more each year, a not insubstantial improvement to the bottom line.

As of right now, DEF is sold under brand names like Terracair, AdBlue, BlueSky, AiRx, SkyBlue, Air Shield and BlueDEF, among others. Expect more brands to come along as production ramps up on vehicles equipped with this technology, as estimates are that 90 percent of heavy- and medium-duty vehicles and 75 percent of light-duty trucks manufactured in 2010 will use SCR/DEF, making it a definite growth industry in coming years as more of these vehicles fill fast lube service bays.