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Wednesday, January 26, 2022

Australia to boost urea production to keep trucking industry moving

The Australian government has agreed to help national industry rapidly design and develop new urea manufacturing capabilities to address shortages that are plaguing the country’s diesel fleet.

To address the imminent deficit, the Australian government has entered into an agreement with fertilizer manufacturer Insitech Pivot to immediately begin the design, testing and testing of large-scale urea production to meet the country’s demand.

A large proportion of Australia’s diesel vehicles require AdBlue – a brand of urea-containing diesel exhaust fluid – including in farming, mining, public transport and trucking.

AdBlue is mandated for use in modern diesel vehicles as part of a strict European-based regulation to reduce harmful emissions such as nitrogen oxides. While vehicles may be able to operate with urea, it is illegal to shut down the mechanism.

Yug Times Photos
Closeup of AdBlue and diesel cap in a car. (Ruslan/Adobe Stock)

Energy and Emissions Minister Angus Taylor, a member of the recently formed “AdBlue Taskforce” responsible for tackling shortages, reassured that current stock levels of urea were sufficient while the foundation was being laid for new production.

“Australia currently has substantial stocks of AdBlue stock, but this agreement with Insitech Pivot will enable domestic production [urea] or existing supply chain disruptions to ensure the supply of AdBlue product to domestic manufacturers does not impact Australian businesses,” Taylor said.

It comes as China – the world’s largest exporter of urea – has choked exports of the commodity to prioritize domestic fertilizer supplies, with Australia the source of 80 per cent of its demand.

“The increase in production by IncyTech Pivot will be done without impacting agricultural fertilizer supplies to local farmers or disrupting the local distribution chain for AdBlue,” Teyor said.

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“The agreement is another important part of the government’s broader strategy to build supply chain resilience, which includes addressing shipping issues, ensuring local supplies of critical products, and strengthening local manufacturing capacity.”

Australia's Energy Minister Angus Taylor
Australia's Energy Minister Angus Taylor
Australia’s Energy Minister Angus Taylor speaks during Question Hour in the House of Representatives at Parliament House in Canberra, Australia. on July 4, 2019 (Tracy Nearme/Getty Images)

Domestic production has been boosted by global supply chain issues coupled with rising uncertainty over timely delivery of cargo by sea.

With the announcement, the government is working with shipping companies to ensure that urea gets priority for loading and delivery on its way to Australia.

“Shipping companies have been helpful in prioritizing the loading of many containers coming through Singapore to ensure that supplies reach Australia as quickly as possible,” Taylor said.

Last week, Trade Minister Dan Tehan reassured Australians that the amount of urea was sufficient to support the nation until a new supply was established.

Australia has also shown interest in procuring urea, along with Indonesia, Saudi Arabia, the United Arab Emirates, Qatar and Japan.

Nations around the world had already taken steps to secure the resource, including South Korea, which announced last month that it would airlift 27,000 liters of urea solution from Australia.

Daniil Khmelev

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Daniel Khmelev is an Australian reporter based in Perth who covers energy, technology and politics. He has a bachelor’s degree in mathematics, physics and computer science. Contact him at [email protected]

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