South Korea is flying a military oil tanker to Australia this week to airlift 27,000 liters of urea solution, used in diesel vehicles and factories to cut emissions, amid a dire shortage threatening to stall commercial transport and industries.
Approximately 2 million diesel vehicles, mostly cargo trucks, are required by government to use the additive, industry experts said.
Diesel vehicle drivers have started panic buying urea after key supplier China last month tightened exports for its domestic market. From January to September, nearly 97 percent of South Korea’s urea imports came from China, the South Korean Ministry of Trade, Industry and Energy said.
Photo: Reuters
The shortage is threatening to halt delivery trucks carrying gasoline and other fuels to local gas stations, an official from one of South Korea’s major refiners said.
“If gas stations do not manage to receive sufficient amount of fuel, it could attribute to jump to logistical cost across almost all industries, which eventually could burden consumers — price increases in ordinary consumer goods,” the official said.
However, the shortage could have an even greater impact on South Korea’s industrial sector, which is also mandated to use urea to cut pollution or stop production.
Of the 835,000 tonnes of urea imported last year, 34.7 percent were for industrial use, 9.8 percent for cars and the rest used to make fertilizers in agriculture, the South Korean Ministry of Environment said.
A major urea supplier in the country said it had not been able to import urea material from China since the middle of last month, which had resulted in a drop in the operation rate of its urea solution production line in South Korea.
The industrial urea inventory, which keeps factories running, is already low, a source from the manufacturing industry said.
“What we could do to alleviate the urea shortage for factory operation is to ask the government to relax these environmental regulations to make it through this,” the source said.
If the urea shortage persists, the auto sector, which already faces a semiconductor shortage and price hikes in raw materials, would find it difficult to get parts from suppliers, said Lee Hang-koo, an executive adviser at Korea Automotive Technology Institute.
“It could end up keeping South Korean automakers’ factories abroad from manufacturing vehicles as much as they would like to because their auto parts suppliers would not be able to deliver their parts to export ports to ship their products,” he said.
South Korean President Moon Jae-in yesterday tried to calm public fear, telling a Cabinet meeting that there was no need for “excessive concern” and help was on the way.
The government has released urea stockpile from the public sector to areas in urgent need and said there would be a temporary release from military stockpiles.
South Korean Minister of National Defense Suh Wook told a parliamentary committee meeting yesterday that the military plans to release about half the stockpile of 445 tonnes of the automotive urea solutions to civilians as a loan.
South Korea secured 200 tonnes of mass urea from Vietnam this week and is in consultation with other nations for up to 10,000 tonnes, enough to make about 30,000 tonnes of the diesel exhaust fluid. The defense ministry yesterday said the first batch of supply from Australia had been secured.
In 2015, South Korea made it mandatory for diesel vehicles to use urea solutions to control emissions, which now impacts 40 percent of registered vehicles.
Diesel vehicles made since 2015 must be fitted with a so-called selective catalytic reduction (SCR) system that requires injection of urea solutions that help scrub nitrogen oxide from diesel exhaust causing air pollution.
Without the urea solution, passenger cars do not start and trucks can only travel up to 20kph, forcing some desperate drivers to try and rig their vehicles or use urea emulators to trick the SCR system, local media reported.
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