Most people didn’t even know this essential product even existed - but now there’s a shortage it will have a huge impact on Aussies.
Behind the scenes of our everyday lives there are numerous complex systems that make it all possible. From the water infrastructure that delivers clean drinking water to our taps, to the global supply chains that provide a steady flow of goods for our consumption, these systems are generally taken for granted and rarely warrant more than a passing thought.
That is until the pandemic.
Since the pandemic first struck at the centre of the world’s manufacturing heartland in January last year, the fragility of some of these systems has been exposed as it becomes clear that they can’t simply be switched off and back on again without issues arising.
The one that we have generally become familiar with in recent months is the supply chain issues that have resulted in long waits for some goods, rising prices and in some cases empty retailer shelves.
Trouble for truckies to tradies
In recent months another issue has arisen that is arguably even more concerning and could bring Australia effectively to a halt if not adequately addressed in a timely fashion, a shortage of diesel exhaust fluid (DEF) also known as AdBlue.
AdBlue is injected into the exhaust systems of a large proportion of modern diesel vehicles, including roughly 50 per cent of the nation’s truck fleet in order to reduce emissions.
While it’s possible to adapt vehicles to run without AdBlue, it is highly illegal to do so and would result in heavy fines from authorities.
From the modern diesel powered trucks that deliver food to our supermarkets to Australia’s best-selling car, the Ford Ranger (which only comes with a diesel engine), all could come to a halt if their AdBlue tanks run dry if alternative supplies can’t be sourced before Australia’s supply is exhausted.
Why is there a shortage?
Around the world there is currently a major shortage of urea, which is a key material in manufacturing AdBlue and is also a major component in some types of fertiliser.
With global fertiliser prices currently sitting at near record highs after more than tripling since the start of 2020, some fertiliser exporting nations are placing curbs on exports in order to ensure domestic supply and to keep prices more affordable for their farmers.
The world’s two largest urea exporters who account for almost one-quarter of all global exports, Russia and China have both limited or placed temporary bans on urea exports.
Prior to the ban on exports China supplied Australia with roughly 80 per cent of its urea needs, which has now left Australia in an extremely vulnerable position and in need of a swift resolution in finding another supplier.
South Korea was recently left in a similar position due to previously sourcing over 97 per cent of its urea needs from China.
Given the extremely high stakes of running out of urea, the South Korean government has been working feverishly to find alternative supplies to ensure that their road transport network remains at full strength.
On Tuesday, the South Korean government announced that it had secured an alternative supply from Indonesia after signing an agreement to purchase 120,000 tons of urea per year, including a batch of 10,000 tons to be shipped in the coming weeks.
Australia’s tank is running low
National Road Transport Association (NatRoad) CEO Warren Clark recently told news.com.au that Australia’s stock of AdBlue would run out by “about February next year”, but warned that it could happen earlier.
“To be really clear, the lack of AdBlue, without breaking the law, is going to have a large impact on everyday Australians, everyday consumers and everyday business owners,”
“We’ve got a freight supply chain under extreme pressure coming out of Covid, and about 50 per cent [of Australia’s truck fleet] runs on AdBlue, so it’s a massive issue, it’s half the fleet, so what happens then?” Clark said.
Given the enormity of the potential impact of an AdBlue shortage on supply chains and the availability of goods to consumers, Clark said the government needed to address the crisis immediately.
“This is a supply chain issue the Government needs to look at, because they’re the only ones who can fix this,” Clark said.
While some of Australia’s own exports could potentially be redirected toward domestic use, Australia’s exports are only a tiny fraction of broader domestic demand.
Solutions and a more long term problem
With just months remaining until the nation’s supply of AdBlue could run dry, the federal government may need to follow South Korea’s lead, to step in and seek a swift trade agreement to ensure a continued supply.
An agreement with Indonesia could potentially resolve the issue relatively swiftly, if they are in possession of sufficient supply given our proximity geographically.
But the potential shortage of AdBlue is a symptom of a much larger and potentially far more protracted problem, the high cost of fertiliser.
As key export nations increasingly look to guarantee their own farmers have a sufficient supply of affordable fertiliser to ensure domestic food prices remain as affordable as possible, this is having a profound knock on effect for fertiliser prices globally.
While there will hopefully be some measure of relief from falling gas prices (a key component in nitrogen based fertilisers) after the conclusion of the Northern Hemisphere winter, the high cost of fertiliser may persist as a long term issue.
High stakes, little time
As warnings from experts continue to grow louder and we approach the end of the year, it’s clear we have encountered yet another kink in one of our civilisation’s complex systems that the vast majority of us have taken for granted.
Whether it will be resolved before there are disruptions to the nation’s transport network remains to be seen, but one imagines that avoiding this would be a top priority.
Currently the government has stated that it is monitoring the issue and that it is aware of the concerns about the supply of AdBlue.
Tarric Brooker is a freelance journalist and social commentator | @AvidCommentator