Australia’s largest AdBlue manufacturer, AUSblue, says it is racing to secure urea supply or even formulated AdBlue from overseas in a bid to keep the haulage industry moving through the summer.

Simon Henry, the chief executive of AUSblue’s parent company DGL Group, told the ABC the company had heavy-lift charter planes standing by to bring in 250 tonnes of urea each per flight from the Middle East and Asia.

A man wears a construction hat inside a factory.
Simon Henry says a “perfect storm” is behind the AdBlue crisis.(Supplied: Simon Henry)

Technically known as diesel exhaust fluid (DEF), AdBlue is an anti-pollutant that is added to most modern diesel engines, and urea is a key ingredient in making it.

A global shortage of urea has sparked a scare among truck drivers and the transport industry, who fear it could cripple the transport networks that provide daily consumer goods to Australians.

“We worked all through the weekend up to midnight, we have pulled out all stops to get dribs and drabs of material out of plants around the world. We are having some success,” Mr Henry said.

“We’ve also got some producers overseas that will probably supply us with some formulated AdBlue. It is significantly more expensive but critical, it will keep things moving through the summer.”

Already, the prices for AdBlue have quadrupled in parts of the country, prompting the Australian Competition and Consumer Commission (ACCC) to investigate “whether an authorisation is needed to allow diesel exhaust fluid producers to share information”.

Trade Minister Dan Tehan said on Monday that Australia had around seven weeks’ of supply left and was also in talks with trading partners including Indonesia, Saudi Arabia, the United Arab Emirates, Qatar and Japan.

‘Overlooked’ supply chain item

Australia consumes between 130 million and 150 million litres of AdBlue a year, and Queensland-based AUSblue is responsible for about half of that supply, according to Mr Henry.

He said urea was now “the Achilles’ heel of the Australian economy”.

“In many ways, it’s such a benign material that’s almost overlooked,” he said.

‘Perfect storm’ for a global shortage

Mr Henry said although AdBlue was not a dangerous chemical, maintenance work at multiple urea plants, COVID-related shipping constraints, and rising diesel consumption had created a “perfect storm” for a shortage to occur.

“Multiple producers of urea are either shut down or in maintenance or they have been directed by their respective governments to focus on their agricultural urea market,” he said.

Domestically, Brisbane-based manufacturer Incitec Pivot, which produces urea suitable to make AdBlue, is also carrying out maintenance work.

Mr Henry said his company had about 2,000 tonnes of urea in its warehouses. If the company rations it, with the support of the government and “a bit of luck”, he said he believed it could get through January.

He added that he anticipated that the crisis would be over in March or April next year, when urea plants come back on stream and stocks start to flow again from February.

Farmers call for ‘business as usual’

On Tuesday, National Farmers Federation chief executive Tony Mahar said the federal government and suppliers had advised his organisation that there were sufficient supplies of AdBlue.

“The NFF issued a mayday call to government after concerns were raised about an AdBlue shortage due to a limited supply of urea,” he said.

“We understood there was already up to six weeks of AdBlue on hand in Australia, and we have been assured new supply has been secured from a wide range of sources including Indonesia and the Middle East. Local supplies are also being boosted.

“This now must be business as usual in terms of AdBlue supplies on hand, noting its very short shelf life.”

Greater certainty around supply would be a relief to farmers, who are harvesting a record winter grain crop, and to the greater supply chain, which is operating at full capacity ahead of Christmas.

Mr Mahar said the AdBlue concerns had highlighted the need for an industry-government advisory board on critical supply chain issues.

He is also calling for new investment in improved domestic manufacturing capabilities for key inputs such as fertiliser and chemicals.

Extracted in full from: Australian AdBlue manufacturer charters planes ready to fly in emergency urea as diesel additive crisis continues – ABC News