The Australian government has made an agreement with Australian fertilizer producer Incitec Pivot (IPL) to increase supplies of refined urea for more diesel exhaust fluid (DEF) production to address a potential DEF shortage in the mining and agriculture sectors.
IPL will design, trial and, on completion of tests, scale-up manufacturing of significant quantities of technical-grade granular urea (TGU), a critical component of DEF, also known as AdBlue, Australian energy minister Angus Taylor said. Canberra will provide a grant of A$29.4mn ($20.9mn) to IPL, which in turn will supply TGU quantities as needed by current suppliers, as part of the agreement.
Australia's national road haulage industry body warned earlier this month that the country's diesel market could be affected by potential shortages of DEF because of restrictions China has placed on fertilizers such as urea, a key feedstock for DEF.
DEF is used in catalytic converters that are part of the vehicle exhaust system and injected into exhaust gases and burnt at high temperatures to break down the nitrogen oxides in exhaust fumes. It ensures diesel-fuelled trucks comply with Australia's national emission standards.
The agreement with IPL follows the formation of an AdBlue taskforce to address a potential shortage of DEF.
"Australia currently has adequate stocks of AdBlue on hand, but this agreement with Incitec Pivot will enable domestic production of TGU or supply of an AdBlue product to domestic manufacturers to ensure current supply chain disruptions don't impact on Australian businesses," Taylor said.
The increase in TGU production by IPL will be done without impacting agricultural fertilizer supply to local farmers or disrupting local distribution chains for AdBlue, the minister said.
Canberra has also secured additional supplies of refined urea from Indonesia, which will provide 5,000t in January, Australian trade minister Dan Tehan said. This urea supply from Indonesia is enough to make around an additional month's worth of AdBlue, Tehan said.
"By working closely with our partners, we have been able to secure this critical supply for Australia," the trade minister said.
