Incitec Pivot's Gibson Island plant working 24/7 to bolster AdBlue stocks

Melody Labinsky
By Melody Labinsky
Updated January 13 2022 - 9:43pm, first published January 12 2022 - 7:30pm
Industry, Energy and Emissions Reduction Minister Angus Taylor and Prime Minister Scott Morrison toured the Gibson Island plant with Incitec Pivot Limited managing director and CEO Jeanne Johns in December.

Western Australia transport operator David Fyfe was 'over the moon' when he heard Incitec Pivot Limited was planning to ramp up AdBlue production onshore.

The company received $29.4 million in federal government funding in the days leading up to Christmas in order to secure supplies of the diesel exhaust fluid.

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An Incitec Pivot spokesperson said its teams had been working non-stop throughout the holiday period to expand domestic AdBlue manufacturing and distribution capability.

Incitec Pivot's assessment of AdBlue production has been successful and facilities to increase production and distribution are now being commissioned.

AdBlue production will not impact the company's supplies of fertiliser for farmers.

"Production facilities at our Gibson Island plant in Brisbane are moving to 24/7 operations, including quality assurance testing of AdBlue volumes," the spokesperson said.

"In the short term, IPL is focused on AdBlue production to ensure industry has volumes to service their markets.

"Longer term, we are assessing the manufacture of technical grade urea to directly replace what was previously imported."

Manufacturing at Gibson Island will finish at the end of 2022 and Incitec Pivot has no current plans to change this decision.

Government continuing to work on solutions

Industry sounded the warning bell in early December that without intervention, AdBlue supplies would have run out by February.

Given the importance of AdBlue to the transport sector, the government is considering how stocks could be monitored on an ongoing basis.

A spokesperson for Industry, Energy and Emissions Reduction Minister Angus Taylor said the government would continue working with industry to ensure it remains fully supplied with AdBlue following the withdrawal of Chinese supply.

"Incitec Pivot's additional production is only one element of Australia's response to the urea supply disruption," the spokesperson said.

"Through the ongoing National Coordination Mechanism and supplier meetings, the government is also continuing to work with other AdBlue manufacturers on ensuring they can access additional international supplies of AdBlue or technical grade urea, which complements the additional AdBlue supply from Incitec Pivot."

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According to Mr Fyfe, who is president of the Livestock and Rural Transport Association of Western Australia, it should not have been up to industry to raise the alarm.

"I'm seething about how it happened; most of the government went home for Christmas and left the industry reeling," he said.

"The person who has made all this come together pretty well is [Road Safety and Freight Transport Assistant Minister] Scott Buchholz.

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"He is a friend of the livestock and rural transport associations around Australia.

"He really pulled a few out of the hat to make this happen."

Securing domestic supply long-term

Some Australian transport operators have indicated they would be willing to pay a reasonable premium to ensure sufficient AdBlue supplies can be produced in Australia.

Livestock and Rural Transporters Association of Queensland president Gerard Johnson said most people would be happy to pay a reasonable premium to support onshore production, whether it was for AdBlue or diesel.

"I think it's obviously a good idea, along with our fuel supply, to have some sort of reserve for a few months on hand at least," Mr Johnson said.

"It's a good move to have some sort of local production, so we aren't in this situation again."

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Australian Trucking Association chairman David Smith said Incitec Pivot had hit the ground running and "instilled a bit of confidence back in the game".

"My own business would be prepared to pay a bit more to gain some assurance in terms of local production," Mr Smith said.

Mr Fyfe disagreed and said he would not be willing to pay extra.

Securing locally produced supplies was a government matter, he said, and that is what people elected government to do.

It's a good move to have some sort of local production, so we aren't in this situation again.

- Gerard Johnson

Mr Smith said businesses were still paying double what they had previously for AdBlue.

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He recognised prices may never return to the same level but hoped it would scale back somewhat.

Mr Smith said there were still some areas where AdBlue was in short supply but the situation would right itself in time.

Tight spots included key sites in Western Australia and South Australia as well as the Riverina and NSW South Coast.

Some stock had already been delivered to Parkes and Jerilderie in NSW and Goondiwindi on the Queensland/NSW border.

Mr Smith said these areas were not out of the woods yet but it had taken a bit of the pressure off.

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Melody Labinsky

Melody Labinsky

National machinery and agtech writer

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