‘Doomed’ Incitec Pivot plant helped nation dodge AdBlue crisis

Stepping up during a national crisis won’t be enough to save the Brisbane-based manufacturing facility.

Without the AdBlue additive many modern trucks won’t work.

The nation’s trucks were able to stay on the road this summer with the help of 170 staff at Incitec Pivot’s doomed manufacturing plant outside Brisbane who worked around the clock to make the fuel additive AdBlue.

The fact that the Gibson Island ammonia plant very much remains earmarked by Incitec for closure by December won’t be lost on both sides of politics in developing a domestic manufacturing policy for the nation.

A global supply squeeze on refined urea, the critical ingredient used to manufacture diesel exhaust fluid AdBlue, threatened to bring the trucking industry to a halt. Most modern truck engines won’t run properly without the additive that sharply reduces exhaust emissions.

This was adding further pressure to transport shortages and staff absences in some parts of the country due to Covid infections or isolation. As well as transport, the crisis had the potential to hit mining and construction which also rely on machinery.

Incitec Pivot chief executive Jeanne Johns. Picture: Aaron Francis

Shortly before Christmas the Morrison Government moved with a $30m facility for Incitec to sharply ramp-up local production of refined urea to produce AdBlue. Previously Incitec was supplying around 10 per cent of the nation’s refined urea needs but the number is expected to be much larger now.

Energy Minister Angus Taylor on Thursday said Australia “currently has sufficient volumes of AdBlue to meet our needs”.

“Our decisive action to support Incitec Pivot has seen rapid ramp-up of AdBlue production to support additional supply to the market”.

Taylor said 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 to complement the Incitec Pivot supply.

Incitec has cited high gas prices for a decision to close the Gibson Island plant. It is currently examining a shift to manufacturing “green ammonia” with Andrew Forrest’s Fortescue. However this is at an early feasibility stage.

Fortescue’s Andrew Forrest is looking at options for the Gibson Island plant. Picture: NCA NewsWire/Tertius Pickard

Incitec chief executive Jeanne Johns said the AdBlue crisis hasn’t been able to sway the company’s thinking toward the Gibson Island plant. At the time of the announcement of its closure last November Incitec said it was unable to secure affordable feedstock gas for the plant.

“The anticipation is that the global supply chain will resume over time but fundamentally we run out of gas at the end of this year and we will have no capability of manufacturing AdBlue at that point,” she told an investor briefing on Thursday.

“At this point the difficult decision made last year remains in place and we’re progressing along those lines based on the current market conditions,” she said.

She said the decision to close the plant was made after considering a number of different gas pricing ranges. “Without competitive international gas the economic viability of the plant just didn’t justify keeping it open,” she added.

While this puts focus on Australia’s east coast LNG export industry, producers have argued pricing on offer in the domestic market – including for Incitec – remain at globally competitive rates.

Johns acknowledged Incitec’s staff had to refocus the company’s operations over what is usually a quiet holiday period.

“It’s hard to over-estimate the work that was put in whether it was adblue manufacturing facility at gibson island or the extent of the network”.

She noted Incitiec had significantly ramped up its typical production of AdBlue and it also resulted in a rethinking of the logistics network to ensure the product could get to all parts of the country. Even with Gibson Island slated to close Johns says there is still a place for local manufacturing during times of stress for the country.

“We’re the only manufacturer of urea in the country and therefore it provided an opportunity to step up to the country’s challenges and keep Australia moving,” she said.

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