Brisbane chemical manufacturer Incitec Pivot Limited has announced an agreement with the Australian Government to ramp up urea production and shore-up the country’s dwindling stockpile of diesel vehicle additive AdBlue.
Energy Minister Angus Taylor announced today the loftily named AdBlue Taskforce had reached agreement with the company to boost its local production and storage of Technical Grade Granular Urea (TGU), an ingredient in the additive that reduces nitrous oxide particles.
The taskforce is interestingly enough led by Chair of Manufacturing Australia and former Incitec Pivot CEO James Fazzino, along with former Chairman and CEO of The Dow Chemical Company Andrew Liveris, and Australia’s Chief Scientist Dr Cathy Foley.
Incitec Pivot will now be in a position to supply quantities needed by current suppliers, Minister Taylor’s office said, adding it would by extension make the local supply chain more resilient, and give the logistics industry some desperately needed supply certainty.
The company until now has made around 10 per cent of the national AdBlue supply to supplement imports – a ratio that will spike.
“Australia currently has adequate stocks of AdBlue stock 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,” Minister Taylor said.
“The ramping up of production by Incitec Pivot will be done without impacting agricultural fertiliser supply to local farmers or disrupting local distribution chains for AdBlue,” he added.
Australia imports about 80 per cent of its urea needs, largely from China, but that supply source has since been cut off. The result has been a spike in prices of the additive, and even rationing, though the government claims Australia still has adequate supply.
Indonesia has offered to provide a further 5000 tonnes of refined urea in January, enough to make around a month’s worth of AdBlue, Trade Minister Dan Tehan added on Monday. The offer has since been accepted.
“By working closely with our partners, we have been able to secure this critical supply for Australia. We will continue to strengthen our close relationships around the world to support and further Australia’s interests,” Minister Tehan said.
Incitec Pivot added it was working to build additional storage capacity to support the supply chain and eager customers.
“Our expert teams have been working around-the-clock on a solution to help address an Australian AdBlue supply shortage,” claimed CEO Jeanne Johns.
“We’re very pleased our domestic manufacturing expertise can be mobilised and we’re working together with the Federal Government to expand supply of this critical material that we all rely on to keep Australia moving.
“… COVID highlighted the importance of Australian manufacturing and we are proud to play our part in securing domestic supply chains.”
AdBlue is a fluid made from deionised water and urea that’s injected into the exhaust and breaks down nitrogen oxides. Many OEMs program the electronic control units (ECUs) in their vehicles so they enter a so-called limp-mode when starved of AdBlue.
AdBlue-reliant vehicles can technically run without the fluid with an ECU flash.