What does an AdBlue shortage mean for industry?
AdBlue is a key component in transportation. Here we consider how a shortage of AdBlue could impact industries and the current solutions implemented to counteract high global demand and supply shortages.
What is AdBlue?
With a global focus shifting towards tougher environmental regulations and lowered emission targets, the introduction of AdBlue has become common to many modern diesel engines. AdBlue is a Diesel Exhaust Fluid used as an anti-pollutant for most modern diesel engines. Comprised of urea and denoised water, AdBlue is placed into the exhaust pipe breaking down unburnt fuel into water and nitrogen. Injected from the exhaust pipe it disintegrates harmful nitrous oxide.
Industries rely on AdBlue
Changes to emissions targets means diesel reliant industries require AdBlue. Any current or future changes to supply greatly impact the following industries:
Shortage + Impacts
Beginning in July 2021, Chinese domestic shortages of fertilisers meant urea exports were restricted to enable better domestic supply of urea. Urea is one of the key components of AdBlue comprising 32.5% of the fuel. China supplies Australia with 80% of the urea needed for AdBlue production, so with international prices soaring by 50% between September and October the shortage dramatically worsened. Many countries globally have adopted EURO 6 regulations reducing nitrous oxides through the use of an after-exhaust treatment in selective catalytic reductions, to which AdBlue is the principal component. Hence the high demand worldwide for the product.
With the average truck consuming 1L of AdBlue over 70km, many diesel trucks would be seriously impacted if AdBlue was not readily available. The shortage would cause mass logistical disruptions across many different industries including posing risks to supermarket and pharmaceutical supplies Trucks are used to supply petrol and diesel nationally so there would be a knock-on impact of fuel shortages to all consumers. Similarly semi-trailers would face difficulties if AdBlue was in short supply which in turn would affect the transportation of steel from ports to the construction and mining industry. Machinery used for harvesting such as tractors, would also be adversely impacted decreasing farming activity. And within South Australia, AdBlue is used for power generation for key services such as hospitals where AdBlue is used to powers backup generators.
In response to the AdBlue shortage, emergency cabinet meetings and task forces were assembled to brainstorm solutions to the current shortage and prevent future AdBlue storage issues. From the 22nd of December 2021 the ACCC suspended its ‘Anti-Collusion’ rule which prevents companies from conferring and sharing sensitive information. The decision was made to lift the rule within industry for governments and companies to share information about urea stock and AdBlue supply levels within specific geographic areas. This ruling by the ACCC also allows for companies to negotiate and collectively decide on pricing limits for both wholesale and retail limits.
To further address the urea shortage the Australian government gave Australia’s top AdBlue producer ‘Incitec Pivot Limited’ a $29.4 million grant allowing for 5000 tonnes of area to be produced for manufacturers. The grant allows for an increase in production by 800%, with figures showing that within January IPL were able to manufacture three million litres of AdBlue, enough to supply 75% of Australia’s existing AdBlue needs.
How Durotank Can Help
Durotank offer a range of Self Bunded Diesel/AdBlue (DAB) trailers and Self Bunded Diesel/AdBlue (DAB) Fuel Tanks equipped to manage AdBlue fuel storage requirements. Ranging in size from 1200L- 100,000L our tanks store diesel and adblue in one self bunded convenient unit, whilst our DAB trailers safely store and transport AdBlue and are 100% Australian designed and manufactured able to handle harsh conditions. To find out more about how we can assist your fuel storage requirements get in touch today on 1 300 829 802.
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