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All types of hydraulic fluids may encounter thermal excursions at some point during their lifetime in use. When this occurs, there is the potential for the formation of degradation by-products. For most hydraulic fluids, including water-glycols, these degradation by-products include various low molecular weight carboxylic acids, e.g. formic acid and acetic acid. This paper describes the potential formation of these acids and the impact of their presence on wear and corrosion of hydraulic systems.