UPDATE 1-Urea shortage threatens South Korea’s transportation and energy industries

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(Add quotes from a local truck driver)

By Sangmi Cha and Heekyong Yang

SEOUL, Nov. 9 (Reuters) – South Korea is sending a military tanker to Australia this week to airlift 27,000 liters of urea solution, used in diesel vehicles and factories to reduce emissions, against a backdrop of severe shortage threatening to block commercial transport and industries.

According to industry experts, around two million diesel vehicles, mostly freight trucks, are required by the government to use the additive.

Diesel vehicle drivers started panicking buying urea https://www.reuters.com/world/china/skorean-drivers-panic-buy-urea-after-china-tightens-supply-2021-11 -05 after month key supplier China tightened https://www.reuters.com/article/china-urea-idUSKBN2H40Z7 exports for its domestic market. Nearly 97% of South Korea’s urea imports came from China between January and September, the Commerce Ministry said.

“I drove about 70 kilometers to a gas station just to get a urea solution for my truck and there were long lines of vehicles and my turn did not come so I left with my hands empty, “Lee Byung-ki, 63, told Reuters. , adding that he couldn’t continue working from Wednesday unless he found urea.

The shortage threatens to stop delivery trucks carrying gasoline and other fuels to local service stations, an official at one of South Korea’s major refiners said.

“If gas stations fail to receive a sufficient amount of fuel, it could lead to increased logistics costs in almost all industries, which could eventually burden consumers – increasing prices for ordinary consumer goods. “

But the shortage could have an even bigger impact on South Korea’s industrial sector, which also has a mandate to use urea to reduce pollution or shut down production.

Of the 835,000 tonnes of urea imported in 2020, 34.7% was for industrial use, 9.8% for cars and the rest used to make fertilizers in agriculture, the environment ministry said.

A major urea supplier in the country said it had not been able to import urea from China since mid-October, resulting in a drop in the operating rate of its production line of urea solution in South Korea.

The stock of industrial urea, which keeps factories running, is already low, a manufacturing industry source told Reuters.

“What we could do to alleviate the shortage of urea for the operation of the plant is to ask the government to relax these environmental regulations to get by.”

CAR MANUFACTURERS ARE CONCERNED

If the urea shortage persists the automotive sector, which is already facing a shortage of semiconductors https://www.reuters.com/article/chips-shortage-explainer-int-idUSKBN2BN30J and price increases of raw materials https: //www.reuters. com / business / energy / world-bank-sees-significant-inflation-risk-high-energy-prices-2021-10-21, would struggle to get parts from suppliers, said Lee Hang-koo, executive adviser at Korea Institute of Automotive Technology.

“This could prevent South Korean automaker’s factories overseas from manufacturing as many vehicles as they want, as their auto parts suppliers would not be able to deliver their parts to export ports to ship their parts. products, ”he said.

President Moon Jae-in tried to allay public fear on Tuesday, saying at a cabinet meeting that there was no need to “worry excessively” and that help was on the way.

The government has released public sector urea stocks in areas that urgently need it and said there will be a temporary release of military stocks.

Defense Minister Suh Wook told a parliamentary committee meeting on Tuesday that the military planned to release about half of the stockpile of 445 tonnes of automotive urea solutions to civilians as a loan.

South Korea got 200 tons of urea by mass from Vietnam this week and is consulting with other countries for up to 10,000 tons, enough to make around 30,000 tons of diesel exhaust fluid. The Defense Department said on Tuesday the first batch of supplies from Australia had been secured.

In 2015, South Korea required diesel cars to use urea-based solutions to control emissions, which now affects 40% of registered vehicles.

Diesel vehicles manufactured since 2015 must be fitted with so-called Selective Catalytic Reduction (SCR) systems which require the injection of urea solutions that help remove nitrogen oxides (NOx) from diesel exhaust gases causing pollution air.

Without the urea solution, passenger cars do not start and trucks can only travel up to 20 km / h (12 mph), forcing some desperate drivers to try to rig their vehicles or use emulators to drive them. urea to trick the SCR system, local media reported. (Reporting by Sangmi Cha, Heekyong Yang; editing by Michael Perry)


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