Hacking sees local production ramping up as urea comes on stream
Heavy Vehicle Industry Australia (HVIA) is bullish about national efforts to head off any AdBlue shortage crisis.
The industry suppliers group stated action before and over the Christmas-new year period is paying off.
It noted that some four weeks ago, the federal government charged its crisis management agency, Emergency Management Australia (EMA), with addressing shortages of urea, an essential input in the manufacture of AdBlue.
The first steps involved the Australian Competition and Consumer Commission (ACCC) granting an interim exemption to allow AdBlue manufacturers, suppliers and other stakeholders to collaborate to address AdBlue supply shortages without breaching competition laws.
HVIA chief executive Todd Hacking has been taking part in meetings facilitated by EMA, which is known as a National Coordination Mechanism (NCM).
“Stocks of AdBlue are now steadily improving across priority sites and localised production has been ramping up at an ever-increasing rate,” Hacking said.
He believes confirmation of local supply should give confidence that the situation is being resolved, and that there is no need to stockpile AdBlue.
“It is still crucial that businesses do not hoard the product so those that need supplies have access to them until the situation normalises,” Hacking said.
Incitec Pivot Limited (IPL) is aiming at production of 3 million litres of AdBlue a week from January 16.
The federal government is confident that the combination of IPL’s production schedule and ongoing imports means that will enable petrol stations and other distributors to replenish inventory over the coming weeks.
“The NCM has been a great success in bringing together government, industry and other with stakeholders meetings held almost every two days across the Christmas and New Year break,” Hacking said.
“This has been an incredible effort to everyone involved, in what has been a challenging issue.”
HVIA had begun actively collaborating with government on resolving the issue from the moment international shortages were first identified.
“Many HVIA members have a large stake in this issue and are active participants in ensuring the security of supply to market is guaranteed as soon as possible,” Hacking noted.
Read about the formation of the AdBlue Taskforce, here
Just before Christmas, Incitec Pivot MD and CEO Jeanne Johns addressed the challenge her company faced.
“Our expert teams have been working around-the-clock on a solution to help address an Australian AdBlue supply shortage,” Johns said at the time.
“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.
“We’ve had great support from prime minister Scott Morrison, industry minister Angus Taylor and the federal Department of Industry.
“We will continue to work closely together as we progress our manufacturing assessment and next steps to expand AdBlue supply and technical grade urea production for the AdBlue industry.
“Importantly, our plans to expand production will not impact on the supply of fertilisers which our Australian farmers are relying on.
“With the support of key partners including IOR, IPL is working quickly to build additional storage capacity to support the supply chain and customers.
“Covid highlighted the importance of Australian manufacturing and we are proud to play our part in securing domestic supply chains”
IPL’s Brisbane Gibson island plant produces fertiliser products, along with industrial chemicals for the domestic market.
The plant had been destined to stop local production in favour of imported ‘green’ ammonia in this December, due to high gas prices, but was given a new lease on life through a $29.4 million federal grant to boost domestic urea supply by 5,000 tonnes by the end of the month.
While most of the urea produced is fertiliser grade used by Australian farmers, a small portion is used to make AdBlue solution, supplying around 10% of the Australian market.
The remainder AdBlue market is reliant on international imports which have been disrupted over the last few months.