Warning of diesel impact from Australian DEF shortages

Australia's national road haulage industry body has warned the country's diesel market could be affected by potential shortages of diesel exhaust fluid (DEF) because of restrictions China has placed on fertilizers such as urea, which is a key feedstock for DEF.

The National Road Transport Association (NRTA) has been fielding calls from members reporting retail shortages of DEF. The warning follows China cutting back on its urea exports, which in turn has affected other markets such as South Korea that is seeking to buy new DEF supplies.

The slump in Chinese urea and other fertilizers mirror its near halt to oil product shipments to Australia.

DEF is used in the catalytic converters that are part of the vehicle exhaust system and injected into the exhaust gases and burnt at high temperatures to break down the nitrogen oxides in the exhaust fumes. It is not mixed with diesel. It ensures diesel-fuelled trucks comply with Australia's national emission standards.

The NRTA is also seeking government assistance. "We are calling on the government to convene a task force of industry groups to look at options to mitigate the situation in the immediate term," said NRTA chief executive Warren Clark.

The federal government is working to secure alternative supplies instead of China, said a spokesman for Australia's transport minister Barnaby Joyce.

There is little monitoring of DEF in Australia. The size of the country's DEF inventories is unknown, nor how much is in transit to Australia and what are the projections until there are supply shortfalls.

Diesel is by far the largest segment of Australia's liquid fuels market with diesel averaging around 527,000 b/d during January-October or 60pc of the total average of 873,000 b/d.

By Kevin Morrison