Interview with Joe Hildebrand, 2GB

Joe Hildebrand
AdBlue, urea, manufacturing.

JOE HILDEBRAND: Another reason to be happy is that we might not actually run out of this vital fuel source that most of us, I suspect, only just found out we were so dependent on and the reason for that is a deal struck by the Federal Government just in the last 24 hours or so. And joining me to talk about that is the Minister himself, the Minister for Industry and Energy, Angus Taylor. Welcome to Afternoons.

ANGUS TAYLOR: G’day, Joe. Thanks for having me.

JOE HILDEBRAND: Pleasure. Thank you, Minister. So tell us firstly, what the nature of the shortage Australia was facing. What is AdBlue and urea, the thing that makes it, and why is it so necessary for Australian industry?

ANGUS TAYLOR: Well, going in reverse, AdBlue really matters because we put it into trucks and some cars in order to take away pollutants but those trucks and cars who rely on it can't run without it and so if we run out, the risk is that we are going to lose our trucking fleet. Of course, that would be a very bad thing, of course, but also farmers use it. So headers, they're still out there harvesting right now. A lot of the headers use it. So it's absolutely essential to keep the wheels moving in our economy, quite literally.

JOE HILDEBRAND: Yeah that's right-

ANGUS TAYLOR: It’s made from urea, which is the same. It's a nitrogen fertiliser and made from natural gas, which we use to grow our crops but it's a slightly different type of urea to the one we put on our crops. So we can't just use the same one as we use for fertiliser. It has to be altered in specific ways, purified and that's exactly what Incetic has agreed to do. This transaction allows - ensures that we have enough AdBlue manufactured for the entire Australian market for the coming months, starting from January. That means if there is no other source of supply, we'll have enough here made in Australia. Now, there's a couple of big advantages to that. One is it's local so we don't have to rely on international shipping, which is a big problem and the second is it's a reliable supply. We know we can get it. Whereas relying on other countries right now has been very challenging.

JOE HILDEBRAND: To say the least.

ANGUS TAYLOR: It's a grey situation.

JOE HILDEBRAND: And the reason why we found ourselves with this problem is that the only local manufacturer we had basically now so that we're going to shut up shop. Is that right?

ANGUS TAYLOR: No, it's not actually. What happened is you've seen a major global disruption in the supply of AdBlue and urea more generally across the world, and this has largely been driven by a shortage of gas and rising gas prices. This is a challenge across the world. I've been speaking to my ministerial colleagues from many different countries. They're all faced with the same situation. The good news is we already had seven weeks stock a little more than that around. So we had time but actually, this arrangement ensures that we've got more than enough and will distribute it through our traditional distributors and retailers.

JOE HILDEBRAND: So how long will it take for this deal with the fertiliser manufacturer, you mentioned Incitec, to actually get production up and running. How long will they have to get this moving?

ANGUS TAYLOR: So they'll be able to achieve it in less than six weeks. So it's pretty quick. They've got to add something into their traditional agricultural urea to purify, and that can be done in tanks. They've got to get the tanking facilities in place so it can be very fast and we don't use a whole lot of this stuff. It's not a big volume, but it's an essential volume and so a small part of their total manufacturing can provide everything Australia needs. That's why it's proven to be a very good way through this problem. Most importantly, it means you don't need to rush out and buy additional AdBlue. It's unnecessary and unhelpful for people to do that. There'll be more than enough going around.

JOE HILDEBRAND: AdBlue is the new toilet paper basically.

ANGUS TAYLOR: It is, being that. It's important that we don't turn it into that at a local area because there's more than enough around.

JOE HILDEBRAND: And in the meantime, even if that window isn't met, you guys have also signed a deal with Indonesia, I believe, to import 5000 tonnes of urea next month.

ANGUS TAYLOR: Yeah, we're pretty confident this process will work. There's always a small risk with any manufacturing process that you'll have a hiccup along the way. So, in addition to that, we've got 5000 tonnes, which is about a month's worth of supply coming from Indonesia. So that will fill in the gap but we're pretty confident on the manufacturing solution. Having some additional imports is an extra insurance policy. So we will keep those wheels turning over Christmas and the holiday period.

JOE HILDEBRAND: What sort of products are we talking about, the diesel obviously is essential for just about everything to be moved around Australia. I also saw somewhere, and I don't want to cause any alarm, but I also saw somewhere that it might be critical for the production of beer.

ANGUS TAYLOR: The production - I'm sorry?



JOE HILDEBRAND: Yeah, we heard something. This is the only thing I care about obviously, Minister. I don't know about where your priorities are.

ANGUS TAYLOR: Well very very important for the holiday period.

JOE HILDEBRAND: That was what got me. That's right. There's a farmer who's actually talking about it, said he wanted to get your attention. That's when I panicked.

ANGUS TAYLOR: It's more about moving beer around and there's been an issue with pallets as well, and we've been working to make sure we've got enough of those. So moving beer around has been the real challenge. I mean, of course, if the truck fleet stopped because we didn't have enough AdBlue, you'd see, more than beer not arriving. It'd be broader than that.

JOE HILDEBRAND: But the other stuff is not really that important.

ANGUS TAYLOR: We've addressed this issue and we're in a good position, Joe. So you don't need to go out and buy that extra AdBlue. If you're in a truckie and listening to this programme, or indeed, if you're a diesel driver who uses AdBlue, that's my car does.

JOE HILDEBRAND: There you go. So everything's okay. What a good news day. Energy Minister Angus Taylor, thanks so much for joining us on Afternoons and Happy Christmas.

ANGUS TAYLOR: Thanks for having me, Joe. Same to you and all your listeners.