Urea shortage: Australia must manufacture essential goods

China is staging a dress rehearsal to show how it will win.

China has suddenly banned Urea exports.

No urea, no AdBlue. No AdBlue, no diesel transport.

Australia defeated, not a shot fired!

"A lot of the AdBlue, or the chemical that goes into making it, is imported from China. The supply of ... urea has dried up ..." the ABC reported.

AdBlue is the anti-pollution additive used in modern diesel engines.

As Google explains, "AdBlue is a liquid solution of urea (the stuff found in urine), and when it meets a hot exhaust system it releases ammonia which ... converts dangerous Nitrogen Oxides into two harmless products - water vapour and Nitrogen.

"So will the AdBlue shortage matter to you? Well, apart from having no groceries in supermarkets, AdBlue will stop diesel family cars such as the Ford Everest."

According to Google, "If you run out of AdBlue while you're driving, then the engine's power and performance will be reduced to limit its emissions. Once you've stopped, you won't be able to restart the engine if the AdBlue tank's empty."

AdBlue is manufactured in Australia by several producers.

A company called A. Blue Pty Ltd manufactures AdBlue in Bendigo, for example, and distributes AdBlue as far as Wagga.

But any AdBlue manufacturer needs refined urea as a basic ingredient.

The rest is deionised water.

We have allowed ourselves to become dependent on China.

China's exports supply 40 per cent of the world's urea, and 30 per cent of the world's fertilisers.

China says it needs its fertiliser for domestic use.

Why don't we make urea in Australia?

Well, as I wrote in last week's column, Incitec Pivot is closing its Gibson Island fertiliser plant near Brisbane next year because like so many East Coast manufacturers, it can't get a reliable supply of competitively-priced gas!

Gas forms between 60 and 70 per cent of the cost base for urea production.

In WA, there is Yara's new $700 million Burrup Fertiliser plant in Karratha.

Strike Energy has plans for a $2.3billion urea plant using Perth Basin gas, noting in Farm Weekly, "Natural gas is a critical input into ammonia and urea production and access to competitively priced gas from Strike's Perth Basin resources will be a key enabler of the project.

"Perdaman Chemicals and Fertilisers is planning a $4.3bn gas urea plant at Karratha, but it won't come into production until 2025. Currently, most Australian fertiliser is imported.

"Farm Weekly points out that Australia has a nearly $1 billion fertiliser trade deficit! Australian-manufactured urea is mainly used for agriculture as fertiliser. Australia's nitrogen fertiliser consumption has increased 67 per cent over the past decade.

"Urea is also ... used in ... resins used to manufacture plastics, nitrate used to manufacture explosives, and the base ingredient of a wide range of beauty, pharmaceutical and medical products," according to the GoAuto website.

Are we going to continue to send key industries to China to save emissions?

Manufacturing should be the biggest issue in the forthcoming federal election.

We have to make essential goods like urea in Australia.

Producing urea creates emissions whether the factory is in Australia or China.

It affects the world in the same way, so why the pretence that we can save emissions by sending jobs to China? Why aren't we refining essential rare earths that Australia produces?

Lithium is a key ingredient in electric cars and so many other uses that will reduce emissions.

Does it make any sense to send Australian ore overseas to be refined?

China controls the refined Lithium market, just as it has captured the urea supply.

Our biggest "defence" investment would be to retain control over Australia's riches.

We should be refining our rare earths and maintaining control.

Both Morrison and Albanese seem to be very keen about cutting emissions, but Australian manufacturing and secure jobs must be protected and expanded at all costs.

China could cripple Australia if trucks and trains can't move.

China has taught us a timely lesson just before the election.

Cutting emissions is a fine long term goal, but let's hear more about the immediate future for Australian jobs, and for our defence security which requires an Australian industrial base.