More high grade urea for AdBlue production is on its way, both in the form of a shipment from Indonesia, and from Incitec Pivot Ltd, which is upgrading its Gibson Island plant near Brisbane to increase onshore AdBlue manufacture.
In a joint announcement, Minister for Trade, Tourism and Investment Dan Tehan and Minister for Industry, Energy and Emissions Reduction Angus Taylor said the government, with the AdBlue Taskforce, had struck an agreement with the fertiliser manufacturer to secure local production of refined urea for the supply of diesel exhaust fluid (AdBlue).
Their statement said that under this agreement, Incitec Pivot would rapidly design, trial, and upon completion of successful tests, scale up manufacturing of technical grade granular urea (TGU), a critical component of AdBlue.
"The ramping up of production by Incitec Pivot will be done without impacting agricultural fertiliser supply to local farmers or disrupting local distribution chains for AdBlue," Mr Taylor said.
Incitec Pivot corporate affairs manager Debbie Guest said the changes included expanding AdBlue production at Gibson Island, and undertaking a manufacturing assessment to produce TGU.
Incitec Pivot currently supplied about 10 per cent of the Australian AdBlue solution market and with a government grant of $29.4 million, it was now able to increase this volume.
It was expected the company would complete its testing and commence commercial production by January, 2022.
Mr Taylor's spokesperson said this included the local production of a minimum of 5000 tonnes of TGU a month, enough to produce 15 to 17 million litres of AdBlue per month, once commercial production got underway, which was equivalent to normal monthly demand in Australia.
However, this was still not a long term solution, because during November, Incitec Pivot announced it would have to close its Gibson Island plant as it was unable to secure an affordable long-term gas supply.
It said in a statement: "Incitec Pivot Ltd will reluctantly cease manufacturing at its Brisbane-based Gibson Island plant at the end of December, 2022, after exhaustive efforts were unable to secure an affordable long-term gas supply from Australian gas producers".
"We have no current plans to change this decision," Ms Guest said.
In the meantime, the company would continue to work with the government on meeting AdBlue supply for the Australian market.
An additional 5000t of high grade urea has also been sourced from Indonesia, as announced by the government this week.
This should arrive on our shores in January to be processed onshore with a yet-to-be disclosed company with which the government is still in negotiations.
Mr Taylor's spokesperson said Australia also currently had as much as 7.5 weeks supply of AdBlue in onshore stocks or on boats making their way here.
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