National Road Transport Association of Australia (NatRoad) CEO Warren Clark explained how the limited supply of urea affects farmers in the country. At least half of farm trucks in Australia that run on diesel fuel need an exhaust fluid based on the ingredient. The urea additive called AdBlue helps cut down nitrogen oxide emissions from these trucks, improving air quality as a result.
"In most of the modern diesel [trucks], there's a chemical added to the system called AdBlue. A lot of the AdBlue – or the chemical that goes into making it, is imported from China. The supply of that chemical has dried up from China. Hence, there's now a massive shortage of AdBlue in this country," Clark told the Australian Broadcasting Corporation (ABC).
"We've heard things like the cost of fertilizer in China has internally gone up dramatically, and a large portion of that is urea. So what they've said is that they do not want to export any urea to try and keep the price of local fertilizer down."
According to Clark, AdBlue supplies will dry up by February 2022 based on his "best estimate."
"The national supply chain is already under significant stress thanks to the lingering impact of COVID-19, industrial action at ports, a shortage of drivers and other factors. This could reduce road freight to a trickle."
Clark called on the federal government to act quickly, adding that NatRoad is talking with Deputy Prime Minister Barnaby Joyce about the matter. He nevertheless called on Canberra to act quickly.
"This is a national supply chain issue and what needs to happen here is bigger than industry, this is a government issue. We need to work with the government to try and find additional supplies of the chemical or different countries that we can import or get it from, or we need to increase the manufacture of AdBlue in the country."
The NatRoad CEO warned that the lack of urea "could be a very, very big issue" if not addressed soon. (Related: Global food production teeters on the brink due to widespread fertilizer shortages.)
Australian Trucking Association (ATA) Chairman David Smith also expressed concern over the shortage of urea. "I'm very worried. There's no doubt there is a chronic shortage of urea in this country. Unless we can source some extra urea to make the product, it is going to have a direct impact," he told the ABC.
The ATA chair, who runs a family trucking business in South Australia, said his company's operations were "already starting to be affected" by the shortage. "Some suppliers are actually running very low at the moment and approaching other suppliers. We can't operate trucks without the AdBlue," Smith said.
He also pointed out that the shortage has caused the price of existing AdBlue stocks to rise. According to Smith, the price of AdBlue doubled to AU$0.10 (7 cents) per liter from just AU$0.05 (4 cents) per liter the week prior. "That reflects the shortage straightaway," he said. (Related: THE WORLD GOES HUNGRY: Fertilizer prices projected to reach near-record high in 2022.)
Industry, Energy and Emissions Reduction Minister Angus Taylor said in a statement that Australia has more than 15 million liters of AdBlue, which is equivalent to about five weeks' stock. He added that multiple shipments of refined urea are set to arrive, adding more than two weeks' worth of supply.
"We are quickly and actively working to ensure supply chains of both refined urea and AdBlue are secure so that industry can have certainty about their operations. We are [also] pursuing a range of measures to address global pressures in the urea market," Taylor said.
"I can assure Australians that the [federal] government is working to ensure we do not face any shortages. We will keep our trucks running and Australian motorists on the road."
SupplyChainWarning.com has more on shortages threatening the agriculture industry.