Why the AdBlue shortage?

AdBlue used in truck diesels is produced from urea, but urea’s greatest use by far is in agriculture. Being composed of 46 per cent nitrogen, urea is used by farmers as a source of nitrogen for their growing plants.

Australian farmers consume 1.9 million tonnes of urea every year, yet a staggering 1.7 million tonnes of that is imported. Leonardo’s knowledge of connectivity would have told him that Australia’s perilous reliance on imports of critical products, including the world’s most common fertiliser, granular urea, was stupidity just awaiting punishment.

And the punishment has come – in spades. Farmers are facing urea prices that have doubled through 2021 and truck operators are bemoaning the fact that AdBlue – a direct urea product – is now in short supply and at a much higher prices.

As we all know, no AdBlue means no engine operation and no engine operation means no road transport.

National Road Transport Association chief executive Warren Clark said swift action was needed to avert a major supply-chain crisis.

Australian Trucking Association chief of staff Bill McKinley said the Federal Government needed to provide more support for Australian AdBlue suppliers who were trying to source urea overseas: “It can’t wait another week,” he said. “It certainly can’t wait until after Christmas.”

The Federal Government’s remedy for this nationally-critical situation is to put their best man onto the project: the accountant with the big hat, Deputy Prime Minister, Barnaby Joyce.

No doubt we’re in for a great deal of Government ‘spin’ around what Barnaby does next, but trucksales is aware of at least three projects to rectify the ridiculous import-reliant situation that are already in place.

The most common way of producing granular urea is to convert natural gas from its main constituent, methane (CH4).

Nitrogen from the atmosphere and hydrogen from methane are combined under high temperature and pressure to form ammonia (NH3), which reacts with carbon dioxide (CO2) to form liquid urea (CH4N2O) and water (H2O).

Urea is the basis for AdBlue and it’s granulated to make dry, pelletised fertiliser.

In May 2021, Perdaman Chemicals and Fertilisers signed a 20-year agreement with Incitec Fertilizers Pty Ltd, for up to 2.3 million tonnes per annum of granular urea fertiliser from Perdaman’s proposed Karratha plant that will convert Australian gas into urea.

The $4.3 billion Karratha urea plant in Western Australia is scheduled to start production in the fourth quarter of 2025.

Strike Energy has plans for a $2.3 billion fertiliser project, capable of manufacturing 1.4 million tonnes of urea per year for 30 years. Oil and gas company Strike Energy said the proposal would use gas from its Perth basin project and convert it into fertiliser for the agricultural market.

In May 2021, Leigh Creek Energy Limited proposed the construction of a urea fertiliser plant, based on the Leigh Creek coal deposits in South Australia. The project is in conjunction with South Korean engineering and construction firm DL E&C Co Ltd. The plant will gasify coal deposits formerly used for electricity generation.

The $2 billion Leigh Creek Energy Project (LCEP) is claimed to be the only planned, fully integrated urea production facility in Australia, with all inputs for low-carbon urea production on site. Leigh Creek claimed that the facility would be carbon neutral by 2030.

Hopefully, when these projects eventuate we’ll never have a urea-supply problem again. Of course, with the electrification of trucking, the need for AdBlue may not be so great in the coming years.