Despite concerns from transportation and agricultural groups about domestic supplies of the essential ingredient used to make AdBlue, the federal government has taken steps to allay fears of a shortage.
Most important points:
- The federal government says the AdBlue sector now has extra chain diversity from countries other than China
- At the end of last year, a potential AdBlue shortage was partially avoided by domestic production, but that manufacturer will cease operations at the end of this year
- Queensland Member of Parliament Bob Katter calls for temporary suspension of AdBlue requirement while a domestic urea plant is built
AdBlue is the common and commercial name for Diesel Exhaust Fluid (DEF), an anti-pollution agent that is essential for most modern diesel engines, including those in trucks and some agricultural machinery.
In a statement to the ABC, the Department of Climate Change, Energy, Environment and Water said the DEF market is currently well supplied and there are no projected shortages.
DEF is made from refined urea.
Until last year, most of this main ingredient came from China.
When supply changes caused a shortage of the critical product in late 2021, the Morrison government put nearly $30 million into Incitec Pivot (IPL) to increase domestic urea production at its Queensland plant.
IPL will close its Gibson Island facility at the end of the year due to its failure to secure an affordable raw material gas supply to the East Coast gas market.
With this imminent shutdown, the transport and agricultural sectors are once again concerned about the future supply.
However, a spokesperson for the department said the sector now has additional supply chain diversity from countries other than China.
Long-term state-owned solutions needed
Outspoken federal MP Bob Katter said it is unacceptable for the Australian transport sector to be completely dependent on an imported product.
Mr Katter said that a policy for reserve gas resources is a step to solve the problem in the long term.
“AdBlue is urea, a natural gas of ammonia nitrate,” he said.
“It doesn’t matter how many people raise their hands to produce it, unless the government can lower the price of gas in the long run, it won’t be a viable industry.”
Mr Katter has called for an 18-month suspension of the use of DEF to allow time for the construction of a state-owned urea company.
“You have to have a reserve resource policy, you have to give the money to build the factory because nobody else is going to take that risk, and you have to own the factory now and in the future,” he said.
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