ADBLUE SHORTAGE In Australia

  The urea is worldwide in short now, which means trouble for transport businesses. Urea is a critical ingredient to produce AdBlue which is used to reduce diesel engine emissions. Supply and demand inbalances have pushed up urea’s price, so AdBlue production has fallen. 

Estimates vary, but in some countries, such as in Australia, there’s enough AdBlue to keep their transport fleets running until sometime in the first quarter of 2022. Their government and industry are working together to find solutions – but the prospects are unclear.

WHAT IS ADBLUE?

  Adblue (the registered trade mark for AUS32) is a 32.5% aqueous urea solution developed for use in selective catalytic reduction (SCR) systems fitted to diesel engines. The purpose of this system is to reduce nitrogen oxide emissions present in the exhaust gas stream. Drivers of later model cars and 4WDs may be familiar with the blue AdBlue cap that sits beside the diesel fuel cap on their vehicles, whereas trucks have a separate AdBlue tank and fill point.

Without AdBlue, modern diesel engines will go into ‘limp mode’ automatically. So if supplies run out, then potentially thousands of trucks will effectively be unable to operate.

WHY IS THERE A SHORTAGE?

  Urea is a key ingredient in most fertilizers. It’s largely used in plastics, cosmetics, resins, explosives, laboratory research, medical products, soap, animal feed, beer, many grocery items and so on.

In recent months demand for key crops including corn, soy and wheat has surged. To pursue maximize their yields, farmers have used more fertilizer, which has increased demand for urea and pushed prices up.

  The primary feedstock of urea is gas, but there are complications here too. Key US refineries have closed thanks to hurricane Ida, and Russia as a big gas export country which is involved in the wars, these are leading to more scarcity and higher prices. 

  Currently, China produces around 10 percent of the world’s urea (and one-third of the world’s diammonium phosphate, another key agricultural input). To keep its farmers supplied with fertilizer, the Australian government has closed exports until June 2022. 

  This measure has hit most countries hard, and Australia is particularly exposed. We import around 90 per cent of our urea, with some 80 per cent coming from Chinese producers.  

WHAT DOES IT MEAN FOR TRANSPORT BUSINESSES?

   The shortage of AdBlue will effect transport businesses a lot. Without AdBlue, most vehicles with the modern diesel engines will automatically de-rate and won’t operate beyond moving the truck off the road. 

   Operating without AdBlue, it is needed to re-map the existing truck fleet to function without AdBlue, Australian emission standards would also require temporary to be changed.

In the meantime, prices are rising, adding further cost pressures.