Dakota Gasification said it is prioritizing granular urea production over diesel exhaust fluid (DEF) because of a lack of fertilizer imports, indirectly rebutting US secretary of agriculture Brooke Rollins' claim that the shift was prompted by recent federal guidance around DEF sensors.
Responding to Rollins' comments, Dakota Gasification on Thursday told Argus that it is maximizing urea fertilizer production at its Beulah, North Dakota, nitrogen plant "due to lack of imports into the US and significant need domestically".
The company's statement appears to contradict Rollins' assertion on 28 April that Dakota Gasification is raising urea production and reducing DEF output in reaction to 26 March guidance from the US Environmental Protection Agency (EPA) that diesel engines will no longer be required to have urea quality sensors (UQS). Her remarks came as she outlined for reporters the US government's efforts to address the fertilizer affordability crisis.
A significant portion of domestic fertilizer imports come from the Mideast Gulf, and the supply shock resulting from the US-Iran war has increased the cost and reduced the availability of imports to the US. Since the war started at the end of February, urea at New Orleans, Louisiana, has risen by $159/st, or 24pc, to $629/st. That is $144/st above year-ago levels.
Urea is also used to produce DEF, allowing nitrogen producers to choose between producing granular urea for agricultural use or for urea liquor for DEF.
Argus Analytics does not expect the EPA guidance to reduce DEF demand. Diesel engines are still required to retain their NOx sensors. If an operator dilutes its DEF, the sensors will increase the engine's dosing rate to ensure tailpipe NOx emission requirements are still met, offsetting the reduced urea content in the DEF.
