AdBlue panic buying threatens supply

‘‘There’s confidence from fuel suppliers that between Incitec Pivot and more supply being sourced from overseas, there will be enough supply.

‘‘It is still an issue, but I think the measures we’ve seen put in place are going to see us through.’’

AdBlue is an exhaust additive that limits the pollution output of large industrial machinery, such as trucks and heavy plant.

Its primary ingredient is a refined version of the common nitrogen-based fertiliser urea, otherwise known as Technical Grade Granular Urea (TGU).

China is the world’s largest producer of urea, exporting an estimated 80 per cent of global supply.

However, the country has also been affected by COVID outbreaks and an electricity crisis that has seen factories shuttered, production halved, and exports reduced to preserve internal supply.

In addition, shipping costs have increased by 300 percent due to the COVID pandemic.

Without sufficient quantities of AdBlue, Australia as we know it will grind to a halt.

Trucks will refuse to turn-over, crops will go unharvested, and shelves unstocked.

This is because machinery is hardwired to require sufficient levels of AdBlue before operation, in order to meet national emissions standards.

On Tuesday last week, it was estimated that Australia has enough stock on hand to keep the country running for just over seven weeks.

This was later confirmed by the Federal Government’s National Coordination Mechanism meeting, with the shortage brewing since early December.

In response, the Federal Government has tasked the domestic fertiliser manufacturing company Incitec Pivot with producing large quantities of TGU.

A deal has also been struck with Indonesia, which will see approximately one month’s worth of supply shored up on Australian soil.

But Mr Baxter is concerned that domestic manufacturing of the essential ingredient may not continue beyond the short-term.

‘‘It is my hope that this focus continues, and won’t just occur when faced with shortages,’’ he said.

‘‘I am also concerned that we’ll see things such as panic-buying.

‘‘I’ve spoken with representatives from the company I get fuel from, IOR Petroleum, which operates unmanned fuelling stations.

‘‘They’ve seen a milking of AdBlue stocks, people turning up with intermediate bulk containers and carting off a thousand litres of the stuff without purchasing any diesel.

‘‘That’s the kind of thing we absolutely don’t need.’’

IOR Petroleum operates multiple fuelling stations across the Riverina, including Deniliquin.

They primarily service local transport and agricultural industries.

‘‘Early on we did see increased demand and, in some cases, isolated incidents of stockpiling,’’ IOR executive director Ross Mackenzie said.

‘‘Just as panic buying in 2020 emptied supermarket shelves of toilet paper, if panic buying and stockpiling AdBlue were to happen, we would see similar issues at the pump.

‘‘This would also cause difficulties in logistics planning for AdBlue suppliers and extend delivery timeframes.

‘‘We have been quick to implement limits at the pump and we’re proud of our customers who have worked with us and have been responsible with their AdBlue usage to ensure everyone is able to access their fair share.’’

IOR Petroleum has also joined in calls for the government to extend the domestic production of AdBlue, beyond the current shortage.

‘‘Australia is able to locally source raw ingredients and has the manufacturing capability to make and distribute AdBlue,’’ said Mr Mackenzie.

‘‘While it would not be possible to put aside reserves of AdBlue due to its shelf-life, there may be an opportunity to ensure sufficient quantities of urea are safeguarded onshore to protect our agriculture and transport industries during any future global supply shocks.

‘‘The recent supply chain shock has highlighted the importance of effective onshore supply chain capabilities to complement global markets.’’