This week there have been reports in the media about an impending shortage of urea and Adblue (a diesel exhaust fluid) in Australia. The Guardian news article had the headline “How China’s export ban could force diesel trucks that need the Adblue exhaust fluid off the road and lead to higher food prices”. Let’s examine this fearful claim and see if there is more to the story.
Urea is mainly used as a fertiliser, while Adblue is an additive needed for some model European vehicles produced since September 2015. The car models include Volkswagon, Land Rover, Audi, Mercedes, Peugeot, Citroën and Jaguar. For trucks, most produced since 2009, need to use the additive Adblue. Adblue is a diesel exhaust fluid that is injected into a vehicle’s exhaust system to act as an anti-pollutant. It does this using Selective Catalytic Reduction (SCR) technology which is said to reduce nitrogen oxide emissions by 75% and particular matter by 94% in trucks. Adblue is made up of urea and water. Without Adblue, modern diesel trucks cannot operate properly. This will have an impact on our food and medicine transportation, fire truck mobility, construction and countless other industries that rely on the use of trucks.
China did supply Australia with 80% of its urea, however, due to their rising fertilizer costs, they have decided to ban its export to other countries in July this year. Australia does currently produce urea, with the largest manufacturer of it located at Gibson Island, Brisbane. This company is called Incitec Pivot and is reported to produce 290,000 tonnes per year. Just last month though, the company announced its plan to close its main urea plant by the end of next year. The reason they gave, was because they were unable to secure an economically viable long-term supply of natural gas that they need for its manufacture.
The Australian Minister for Industry, Energy and Emissions Reduction, Minister Angus Taylor has released a statement saying that Australia had close to 5 weeks supply of Adblue. He said that the government was working closely with industry to understand current global pressures in the urea market and any implications that this may have on the supply for Australia. Minister Angus urged people not to try and stockpile Adblue, saying it was unhelpful.
There have been calls from members of the community that the Minister should be sacked. Clearly, the government knew about the cut to supply and impending shortage since China stopped exporting urea to Australia in July; 5 months ago.
Meanwhile, the head of the National Road Transport Association, Mr Warren Clark, has said that a handful of NatRoad members say they could run out of Adblue as early as this week.“Our industry isn’t the only one that will be affected, but we will be hit first and hardest,” Clark said. “These issues go beyond NatRoad and the trucking industry”.
Minister Angus Taylor has announced the establishment of the Adblue Taskforce, alongside the Minister for Trade, Tourism, and Investment Dan Tehan. They have been labelled as a “Taskforce of Bureaucrats” by mainstream media. The Taskforce is led by James Fazzino, the Chair of Manufacturing Australia, and the former CEO of Incitec Pivot (yes, that is the same company looking to cease production of urea in Australia).
Senator Pauline Hanson has put out her own media release, accusing the Morrison Government of being asleep at the wheel in failing to prepare for a looming shortage of Adblue diesel exhaust fluid which threatens the supply of essential goods to Australian households and businesses. She also says that the government’s short-sighted trade policy and obsessions with climate change ideology have led to poor decisions, noting that the facility currently used to produce urea will be used to make hydrogen by Andrew Forrest. She goes on to say, “the government in its obsession with climate change ideology can throw all the taxpayer money it likes at Andrew Forrest to make hydrogen, but no amount of money is going to convert every Australian truck and tractor to hydrogen in time for this looking diesel exhaust fluid shortage”.
Andrew Forrest did secure a $3 billion green hydrogen grant for his strategy, which was unveiled by NSW Premier Dominic Perrottet in October this year. The hydrogen strategy provides up to $3 billion in incentives for green hydrogen production, including tax exemptions, and includes plans for a “hydrogen refuelling highway” between Melbourne and Brisbane.
Andrew Forrest is the mining magnate and cattle station owner, who was the CEO of Fortescue Metals Group. According to Forbes Magazine, he has a net worth of $15.2 billion USD. He is said to be the richest man in Australia and is a known member of The Giving Pledge (the global philanthropy campaign created by Bill and Melinda Gates where the very rich have pledged their wealth; reported to be worth $600 billion).
Andrew Forrest also has an energy company called Australian Industrial Energy (AIE) who signed a 25-year lease for Port Kembla, NSW in November last year. His company stated at the time, that they were speeding up plans for a floating natural gas import terminal at Port Kembla. So, there seems to be a natural gas supply after all that could be used to produce urea in Australia. In addition to this, surely Mr Forrest could produce his hydrogen elsewhere, instead of taking over the existing urea plant in Brisbane.
The situation is quite confusing, where it appears that the urea shortage could of and should have been prevented. Instead of using tax-payer funds to finance hydrogen production (which is still quite undeveloped with its storage and high flammability issues), potentially the government should have been focused on shoring up our supply of Adblue. Adblue itself is an environmental initiative brought in by the Rudd Government in 2009, that needed to be nurtured and has quite frankly been neglected by this current government.
It is surely in the best interests of Australia to keep having urea produced here. In fact, with China unable to supply it to us for who knows how long, now is the time that Australia should be looking to expand its production of urea. This situation serves to highlight Australia’s need to be much more self-sustainable as we head into the future. Our local economy has taken an absolute battering over the last two years due to the incompetence of the Morrison Government and this urea shortage is just another example of it.