03
Dec

Diesel crisis threatens to crash supply chain

Thousands of freight trucks and family cars could be forced off the roads within weeks over shortages of a special anti-pollution ­additive for diesel vehicles – a move that threatens to smash the nation’s already strained supply chain.

Australia’s trucking industry has warned shortages of diesel ­exhaust fluid this summer could cause up to half of all trucks to be removed from the road by early next year because of global shortages in one of its key ingredients.

Advisers from Deputy Prime Minister Barnaby Joyce’s office are set to be told on Friday by the industry that unless the government acts decisively on the shortage, there will be a cascading impact across the country, also ­affecting the agricultural and power sectors which rely heavily on diesel motors.

Urea, which can be used as a fertiliser and feed supplement, makes up a third of DEF, which is injected into the exhaust system to reduce the amount of pollution entering the atmosphere.

But the supply, mainly from China has been slashed, leading to global shortages.

National Road Transport Association chief executive Warren Clark said DEF was at risk of becoming the industry’s toilet paper, with many businesses rushing to buy stock ahead of an expected collapse in supply.

“It is a massive supply chain issue,” he said, warning that the product was being bought in bulk by many Australian users.

“We are talking about a supply chain that’s really under stress at the moment.”

The NRTA estimates up to half of all diesel trucks could be garaged because of the shortfall, with vehicles unable to operate legally without the emissions controls; it is also fraught to try to circumvent the diesel exhaust cleaning systems because there is no guarantee vehicles will operate properly or components won’t be damaged.

The Australian Trucking Association has warned stakeholders the issue will become “much worse by February”. The ATA said many businesses had started stockpiling and buying bulk storage containers to hold the fluid in the event of a crushing shortage.

A spokesman for Mr Joyce said: “The government is aware of the concerns around the supply and availability of (DEF) and is continuing to monitor the situation.”

“We encourage industry operators to continue operating as they normally would.’’

Warehouses in California’s Inland Empire are a crucial step in the U.S. supply chain. Low warehouse vacancy rates in the area combined with port delays are creating a perfect storm of challenges this holiday season. Photo: Sam…
Mr Clark said the industry had learned of the supply problems last month, warning the knock-on ­effect for the economy could be dire if large parts of the national trucking fleet was forced off the road. He said the issue would be profound for businesses across the country, and action needed to be taken by the federal government.

The Department of Prime Minister and Cabinet has been alerted to the issue and has been told that there should be a ban on urea exports from Australia

The ATA said the overwhelming majority of the Asia-Pacific’s supply of suitable urea came from China, amid suggestions China has almost halted urea exports as part of an attempt to cool down its domestic fertiliser prices.

Some modern diesel cars also require the product, with the latest Euro 6 standards demanding a two-thirds drop in nitrogen oxide in the emissions of diesel cars.

DEF, which trades under the name AdBlue, enables the process that targets a vehicle’s nitrogen oxide, with sensors in the exhaust system monitoring the pollution levels. When it’s needed, a spray of DEF is then injected into the exhaust system.

Viva Energy, which provides fuel to about 1300 Shell and Liberty service stations, said it was aware of the global shortage of DEF. Brenntag Australia, which imports the product to Australia, was unable to comment.

A diesel exhaust fluid shortage in South Korea already has raised doubts over the supply chain in Asia’s fourth-largest economy.

The lack of the liquid has undermined the domestic logistics sector, raising concerns about what might happen in a country such as Australia.

A diesel car may not start unless the DEF is replenished in time. There also have been price spikes in the US and Europe amid fears about urea supplies.

Mr Clark said the industry had learned of the supply problems last month, warning the knock-on ­effect for the economy could be dire if large parts of the national trucking fleet was forced off the road. He said the issue would be profound for businesses across the country, and action needed to be taken by the federal government.

The Department of Prime Minister and Cabinet has been alerted to the issue and has been told that there should be a ban on urea exports from Australia

The ATA said the overwhelming majority of the Asia-Pacific’s supply of suitable urea came from China, amid suggestions China has almost halted urea exports as part of an attempt to cool down its domestic fertiliser prices.

Some modern diesel cars also require the product, with the latest Euro 6 standards demanding a two-thirds drop in nitrogen oxide in the emissions of diesel cars.

DEF, which trades under the name AdBlue, enables the process that targets a vehicle’s nitrogen oxide, with sensors in the exhaust system monitoring the pollution levels. When it’s needed, a spray of DEF is then injected into the exhaust system.

Viva Energy, which provides fuel to about 1300 Shell and Liberty service stations, said it was aware of the global shortage of DEF. Brenntag Australia, which imports the product to Australia, was unable to comment.

A diesel exhaust fluid shortage in South Korea already has raised doubts over the supply chain in Asia’s fourth-largest economy.

The lack of the liquid has undermined the domestic logistics sector, raising concerns about what might happen in a country such as Australia.

A diesel car may not start unless the DEF is replenished in time. There also have been price spikes in the US and Europe amid fears about urea supplies.

 

Extracted from The Australian