Australia is set to ramp up manufacturing of a key diesel exhaust fluid ingredient essential to keeping the country’s freight and logistics sectors on track.
- Incitec will soon increase local urea production
- The deal comes after Incitec Pivot announced plans to close a fertilizer plant in Brisbane
- Industry insider warns Australia should have more than one urea plant
The federal government and fertilizer maker Incitec Pivot have reached an agreement to dramatically increase local production of urea, which is used in AdBlue diesel exhaust fluid.
Energy Minister Angus Taylor said Australia currently has sufficient stocks of AdBlue and the deal with Incitec Pivot would allow domestic production of technical grade granular urea (TGU).
“This agreement is another important part of the government’s broader strategy to build supply chain resilience, which includes addressing shipping challenges, securing local supplies of essentials and building capacity. local manufacturing. “
The company will design, test and, once successful, scale up the manufacture of significant quantities of technical grade urea to supply the domestic market.
In November, Incitec Pivot announced plans to close its Gibson Island fertilizer plant in Brisbane by December 2022.
The new deal has brought much needed relief to many in the industry.
âThis is welcome relief from the possible disruption of the supply of AdBlue which is used in some agricultural machinery and road vehicles used by farmers,â said Tony Mahar, CEO of the National Farmers Federation.
âWe congratulate the federal government and the minister [Angus] Taylor for taking decisive action to secure national sources of urea for AdBlue production.
âIn addition to the stock already on hand, new shipments secured over the past month and national capacities brought online, farmers and the agricultural sector can return to a business as usual approach without fear of supply chain disruptions. “
Simon Henry, managing director of DGL Group, the parent company of Australia’s largest AdBlue producer AUSblue, said that while it was good news that there was a local option to produce urea, the industry still had to diversify its sources.
“The idea is to have multiple sources of urea and AdBlue to serve Australia, so that we are not dependent on any source.”
A global urea shortage has sparked fear among truck drivers and the transport industry, who fear it could cripple the transport networks that provide daily consumer goods to Australians.
Indonesia has pledged to give Australia 5,000 tonnes of refined urea in January.
Trade Minister Dan Tehan said that was enough for about a month of AdBlue.
“We will continue to strengthen our close relationships across the world to support and promote Australia’s interests.”
Last week, Tehan said Australia had about seven weeks of urea left, with China restricting exports.
He signaled approaches to boost sourcing with countries like Saudi Arabia, UAE, Qatar and Japan.
At the beginning of November, Australia sent South Korea about 80,000 liters of formulated AbBlue before the crisis hit our shores.
ABC / PAA