Global Urea Shortage Could Park Diesel Trucks

A prohibition of urea exports in China could spark shortages around the world

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Photo: Gregor Fischer (Getty Images)

Freight trucks worldwide are starting to be sidelined by a urea shortage. A wide-ranging variety of factors, from rising fertilizer and natural gas prices to an export prohibition, have strained the world’s supply of urea.

Urea is the primary component of the diesel exhaust fluid necessary in ensuring that diesel combustion engines function within nitrogen oxide emissions standards across the developed world. A urea-water solution is injected into the exhaust stream of diesel vehicles before the gasses pass through a catalytic converter.

Urea is mainly produced with coal or natural gas as a byproduct of industrial ammonia production. The recent rise of natural gas prices has caused a slowdown in urea production. Along with the increased cost of an ingredient, the factories themselves have had to cut output due to electricity rationing in the world’s largest supplier, the People’s Republic of China.

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Urea is also an ingredient in fertilizer. The short supply and rising urea prices have also caused an increase in fertilizer prices. The Chinese government has distributed massive subsidies and banned urea export to assist its farmers and secure its food supply.

South Korea relies heavily on imports of urea from China. Truck drivers have had to turn down jobs if it required running their engines either too long or too harshly as it could mean running out of urea. The country even resorted to airlifting urea from Australia. Now, Australia is at risk of running out of urea. Eighty percent of Australia’s urea supply is imported from China

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This shortage has the potential to continue cascading out of control and affect even more countries. South Korea was able to negotiate a short-term deal with China to resume exports, but how likely is it that China will reach similar agreements with other countries and stabilize the global supply?