News: IPL Australia to ramp up local urea production to avert trucking crisis

SYDNEY, Dec 20 (Reuters) - Australia on Monday said it had struck a deal with fertiliser manufacturer Incitec Pivot (IPL) to secure local production of urea needed to make a diesel additive essential for trucks, as China curbs fertiliser exports to contain prices at home.

Under the agreement, Incitec Pivot will scale-up manufacturing of technical grade granular urea (TGU), a critical component of diesel exhaust fluid known as AdBlue, Federal Energy Minister Angus Taylor said in a statement.

Diesel exhaust fluid is made from urea and is used to curb nitrogen oxides (NOx) emissions.

"Australia currently has adequate stocks of AdBlue stock on hand, but this agreement ... will enable supply of an AdBlue product to domestic manufacturers to ensure current supply chain disruptions don't impact on Australian businesses," Taylor said.

The Australian Trucking Association early this month raised concerns about a looming shortage of AdBlue, which it said could hit trucking operations and threaten goods transport, prompting authorities https://www.reuters.com/world/middle-east/australia-taps-mideast-indonesia-japan-urea-ease-trucking-fears-2021-12-13 to ask Indonesia, Saudi Arabia, the United Arab Emirates, Qatar and Japan for urea.

The ramping up of TGU production by Incitec Pivot will not impact agricultural fertiliser supply to local farmers or disrupt local distribution chains for AdBlue, Taylor said.

Australia imports about 80% of its urea needs, with most of the rest produced by Incitec Pivot.

Indonesia has offered to provide 5,000 tonnes of refined urea in January, enough to make around a month's worth of AdBlue, Trade Minister Dan Tehan said on Monday. He added shipping companies would prioritise the loading of urea and AdBlue that are already on their way to Australia.

Prices for Urea UREA-GRMEA-INX , also widely used as a fertiliser, have surged more than 200% this year amid rising demand and lower supply, while some countries began rationing AdBlue as panic buying by drivers worsened the shortage.