AdBlue manufacturers increase urea stocks to avoid potential supply chain delays

Stocks of the diesel exhaust fluid and access to its key ingredient, technical grade urea, were starting to run low when the issue burst onto the national agenda late last year.

The crisis was averted in large part due to Incitec Pivot Limited increasing production of AdBlue at its Gibson Island facility by 800 per cent.

But with Gibson Island closing on December 31, attention has turned to how other manufacturers have pivoted to ensure any future threats are addressed.

DGL Ausblue general manager Matt Berry said Ausblue and other manufacturers around Australia were now regularly providing their volumes to the Department of Industry, Science and Resources.

Mr Berry said this gave the federal government the ability to see shortfalls well ahead of time and plan accordingly six months in advance.

Ausblue is the nation's largest certified producer of AdBlue and has been manufacturing and distributing the product since 2010.

The company produces approximately 30 to 35 per cent of Australia's AdBlue product and sources its technical grade urea from multiple suppliers throughout the Asia Pacific.

Mr Berry said Ausblue has more stock than it previously kept to cover any future delays in the supply chain.

"In response to the general global supply chain conditions, we have undertaken significant increases in stock levels to ensure there are no shortages in our corner of the industry at any time in the future," he said.

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BioBlue is another certified manufacturer of AdBlue and produces approximately 15 million litres each year.

The Australian company's primary urea supply partnerships are within the Middle East and China.

BioBlue CEO Brad Ryan said the business had been fortunate and was able to anticipate some of the urea supply chain issues prior to the shortages in late 2021.

"At the time we were running a two to three month urea stock surplus and currently have increased this to six to seven months of provisions," he said.

"Although there are significant overheads involved in carrying this surplus it is a necessity to ensure we continue to prioritise supply reliability for our customers as we have done since setting up in 2016."

According to Mr Berry, the industry's main manufacturers have been working hard behind the scenes to ensure there is enough time to respond to any potential shortages in the future.

"Ausblue was in quick communication with the relevant associations and government departments prior to the previous shortage to flag issues as they arose at the end of last year," Mr Berry said.

"We believe the issue that prevented outworking a quicker solution prior to the panic buying ensuing, was the fact that it was the AdBlue industry's first crisis.

"On reflection, there were no processes setup between manufacturers to advise of looming issues within the local industry ahead of time, so the warning was shorter than it should have been to respond."

The majority of Australia's line haul transport operators use AdBlue to lower the concentration of nitrogen oxides in truck exhaust emissions.

It is also used in some newer models of agricultural machinery and diesel four-wheel drives.

Heavy Vehicle Industry Australia CEO Todd Hacking said increasing or improving Australia's onshore urea capability should also be part of the solution matrix.

Three companies - Perdaman, Strike Energy and NeuRizer - plan to build urea manufacturing facilities in Western Australia and South Australia in the next three years.

Mr Hacking said it was important to have a diversity in suppliers of a critical good to the Australian economy.

"AdBlue supplies are currently sufficient, however we would all like to see more onshore manufacturing of urea," he said.

"Without AdBlue, we've seen the devastating potential impacts that has and our supply strategy has to be multifaceted."