Australian trucking representatives say a meeting this week between the industry and the federal government over a looming shortage of AdBlue revealed the government does not know how much of the diesel exhaust fluid remains in the country.
It came as the minister for industry, energy and emissions reduction, Angus Taylor, announced a deal with fertiliser manufacturer Incitec Pivot to secure local production of refined urea for the supply of AdBlue. Industry experts welcomed the agreement, but feared it had come too late to prevent disruption caused by supply problems, especially in regional and rural areas.
Under the new agreement, Incitec Pivot will “rapidly design, trial and, on completion of successful tests, scale up manufacturing of significant quantities of Technical Grade Granular Urea (TGU), a critical component of AdBlue”.
It comes on top of Australia’s acceptance of Indonesia’s offer to provide 5,000 tonnes of refined urea in January, enough to make a month’s worth of AdBlue.
Taylor said the announcement was a step in the right direction to provide the trucking industry with certainty.
“Australia currently has adequate stocks of AdBlue stock on hand, but this agreement with Incitec Pivot will enable domestic production of TGU … to ensure current supply chain disruptions don’t impact on Australian businesses,” Taylor said.
David Smith, the chair of the Australian Trucking Association, said the deal was “fantastic” as more onshore manufacturing was needed in Australia.
However, Smith said it would not provide Australia with urea immediately, and the government could not provide a timeframe for when the local supply will become available.
Smith said a meeting held between the government and industry late on Monday afternoon revealed the government’s AdBlue taskforce still did not know how much product suppliers had.
He said the meeting confirmed the Incitec Pivot deal “probably won’t start until the end of January” while the supply from Indonesia would not arrive in Australia until January either.
Smith said the situation was concerning as “if we’ve already got hotspots where service stations have run out or are rationing, what the hell is it going to look like late January”?
“It’s going to get worse before it gets better.”
A department of industry, science, energy and resources spokesperson told Guardian Australia the statement that the government still does not know how much AdBlue is in the country “is incorrect”.
“The Australian government has commercial-in-confidence data from AdBlue and refined urea suppliers about their current levels of stock on hand and in transit to Australia,” the spokesperson said on Tuesday morning.
“At the National Coordination Mechanism (NCM) meeting yesterday, stock levels were shared with stakeholders in terms of weeks of supply. There are 7.2 weeks of stocks to hand and on water. The government is working with industry to ensure these numbers are updated regularly.”
Warren Clark, the CEO of the National Road Transport Association (NatRoad) also attended the meeting on Monday and confirmed it revealed the government still did not know how much product suppliers had.
The ACCC has not authorised suppliers to discuss their volumes yet.
Smith described the Incitec Pivot plant as old and in need of refurbishment.
According to current predictions, there is enough urea for AdBlue to last until the end of February, but Smith said there were hotspots that needed attention.
He said in areas such as Goondiwindi and the Illawarra, supplies were almost out, while in Western Australia, there were rations in place of 50L of AdBlue per truck. While rationing was not a problem in metropolitan areas, more than 50L was required for long distance hauls, he said.
Smith said that having the necessary supply for trucks to transport produce from the recent grain harvest remained a concern. He believed it would be “late April or early May before we’ll get through the worst of this”.
Tony Mahar, the chief executive of the National Farmers’ Federation, said the government’s announcement comes as “a welcome relief”.
However, Brendan Booth, a farmer outside Dubbo, said his concerns went beyond ensuring the freight distribution of his corn.
“The bigger question is why have we created a road industry that’s so reliant on this product we haven’t guaranteed supply of in Australia,” Booth said.
He said AdBlue is an example of the bigger looming problems with food security and product supply in Australia due to reliance on foreign industry rather than local manufacturing.
He said measures such as the company payroll tax meant the bigger the company is, the more they’re penalised for doing business in Australia, leading many companies to take manufacturing offshore.
For farmers, Booth says “land prices, cost of abiding by regulation, water prices, everything’s gone up, apart from what we’re being paid”.
“The consumer is not going to make an active choice to support a local business until they realise what happens when there is no local business,” Booth said.
Clark agreed: “We need to be self sufficient, especially on these chemicals which are critical to the sovereignty of the supply chain.”
He said rural and regional areas had been worst affected by the shortage.
“There’s some major freight routes now, coming through from South Australia to Brisbane where they’re already out of AdBlue,” Clark said.
He said the government’s announcement has shored up long-term supply but there’s still concern for the immediate future.
Clark said the immediate impact on Australia Post, deliveries of pharmaceuticals and deliveries to supermarkets were the most pressing.
“The problems with this goes through everything, possibly affecting garbage collection in rural and regional areas.”
Scott Davidson, the chairman of NatRoad said: “since late last week, we have been hearing from operators, some of them quite large, who no longer have adequate supply to keep their trucks on the road.”
Catherine King, the shadow minister for infrastructure, transport and regional development, wrote an opinion piece on Thursday calling the AdBlue shortage “the crisis we didn’t have to have”.
King said the trucking industry has known restrictions placed on export of urea from China would eventually hit Australia’s AdBlue supply and have been calling for action since early November.
