Interview with Hugh Hogan, ABC Country Hour

Hugh Hogan
AdBlue, urea, manufacturing.

HUGH HOGAN: The Federal Government has struck a deal with a domestic fertiliser manufacturer to shore up supplies of a critical diesel exhaust fluid used by trucks around Australia. Incitec Pivot will receive $29 million from the Federal Government to convert the Gibson Island Plant near Brisbane to produce 5000 tonnes of technical grade urea every month. High-grade urea is the key ingredient for making AdBlue and Chinese export restrictions were a major reason why Australia's dwindling supplies have been going in of the critical fluid. The Minister for Industry, Energy and Emissions Reduction, Angus Taylor, says the deal will supply enough urea for all of Australia's AdBlue needs.

ANGUS TAYLOR: Look, it's all about securing our motorists on the road, our truckies, our farmers and making sure they have the AdBlue, they need to keep the country moving. It's crucial that we have this AdBlue and this deal is about making sure we have a local supply of AdBlue manufactured here in Australia by Incitec Pivot. It will be capable of producing enough for the entire Australian market from late in January, and that means we can be absolutely sure we have enough AdBlue. We already have now seven weeks or just over seven weeks of stocks either on the ground or on approach to Australia and on top of this, then we'll have local manufacturing to sure up what we need.

HUGH HOGAN: Where will this high-grade urea be made?

ANGUS TAYLOR: It's being made in Gibson Island in - near Brisbane, on the edge of Brisbane and can be supplied right across Australia from there. You supply through traditional supply channels, through AdBlue manufacturers and of course, through our retailers, and so everyone will have access to it and most importantly, it will fill any gaps in the market that might otherwise have been there. It means there's no need to go out and buy extra AdBlue. There will be enough supply and it will be locally manufactured so we won't have to worry about some of the challenges with international shipping at the moment. It will avoid all of those risks. It will make sure there's product on the ground for farmers, for truckies and for motorists more generally in the coming months.

HUGH HOGAN: So Incitec Pivot did announce they were going to shut down Gibson Island because they couldn't get a favourable gas price. So you're going to make up the shortfall there to keep that running?

ANGUS TAYLOR: It is profitable for them to run it. We're making up their requirements that are needed to switch over the processing to high-grade urea, technical grade urea.  That's the contribution from the Commonwealth Government. Incitec's been extremely collaborative in getting this arrangement in place, and it means that it'll be good for Incitec, but most importantly, good for Australian motorists and truckies, because we do need that AdBlue.

HUGH HOGAN: How much is the commitment from the federal government?

ANGUS TAYLOR: It's just over $29 million and that will provide 5000 tonnes a month of technical grade urea, or up to 5000 tonnes a month, which is pretty much the entire Australian market. Now, if that's not needed, if we have other sources of supply, then fine. But it will provide whatever is needed to fill that gap.

HUGH HOGAN: How confident are you and in Incitec Pivot that it can be switched over and be manufacturing at that rate in the time it's required?

ANGUS TAYLOR: Well, it's a very high probability. It's not 100%. These things never are, but it's a high probability. We are continuing to work on alternatives. We've got another 5000 tonnes, which is a month of supply coming from Indonesia as well. So there are alternative sources of supply we're working on but this is the best possible answer. Locally manufactured product, very high probability of success. And of course, it removes any risk of shipping problems, which are very significant an issue in supply chains right now around the world.

HUGH HOGAN: Angus Taylor, Minister for Industry, Energy and Emissions Reductions speaking to Hugh Hogan.