Australia's supply chain is at risk of collapse next month due to a shortage of urea, a chemical additive essential for diesel engines. Half of the country's long-haul truck fleet relies on diesel, and without sufficient urea supplies, these vehicles could be grounded, potentially sparking panic buying reminiscent of the early pandemic period.
Urea is used in diesel exhaust fluid, marketed as AdBlue, to reduce nitric oxide emissions. China, which supplies 80% of the Asia-Pacific region's diesel-grade urea, has suspended exports to control food prices, leaving Australia with only eight weeks of supply. The National Road Transport Association is holding crisis talks with Deputy Prime Minister Barnaby Joyce's office.
Warren Clark of the National Road Transport Association warned of far-reaching economic implications, stating that the transport industry would be hit first and hardest. Allan Thornley, managing director of Shaws Darwin Transport, noted that all trucks less than five years old would be unable to run without urea, leading to a collapse of the supply network.
Australia's only domestic urea producer, Incitec Pivot, is closing its Gibson Island plant in Brisbane in 2022. The federal government is reportedly working on solutions, but details remain scarce. The shortage threatens not only freight transport but also diesel-powered SUVs and utes, which are popular in Australia.
