Changes in raw material cost will massively affect the UK's AdBlue market Due to increased energy costs, the expenses involved in urea production have soared to almost twice that of last year, this is now being reflected on to end users in order to reduce your nitrous oxide emissions, AdBlue can be used. AdBlue is a trade name for AUS32, an automotive urea solution. In order to use AUS32, the vehicle must be equipped with an SCR (selective catalytic reduction) unit. the fluid is passed through the SCR and into the exhaust. AUS32 is made using Urea mixed with De-ionised water.
Many vehicle manufacturers across Europe have embraced this new technology to ensure that their vehicles meet new European standards, Euro 4 and Euro 5. An alternative type of technology is available, EGR (exhaust gas recirculation) but sceptic fear it may not be able to meet the strict demands of future European legislation. As with many other industries, recent increases in gas and oil prices over the past few months have started to affect the costs involved in producing the automotive solution. Considering the primary component is Urea and the continuing increases in energy costs have driven up the cost of production in plants across Europe. Several leading manufacturers of the solution have started to make changes already to compensate for the increased cost of production. with the recent change in the euro exchange rate, British suppliers are even worse off than before.
now with prices exceeding one pound per litre at the pump, the changes have hit many operators hard. Transport costs continue to rise and are higher than ever. Admittedly, drivers and fleet owners will still benefit from the savings to be made when running SCR equipped vehicles but even still it is only a matter of time before haulage rates are increased which will no doubt affect most markets. Inevitably cost savings will need to be made elsewhere, fortunately SCR equipped vehicles will continue to avoid London's recent high emissions tax and other European cities which are expected to follow suit (Birmingham, Paris and Milan) will also offer some comfort to modern fleet owners. This news has sparked some panic buying amongst the larger fleet owners, but with a shelf life of somewhere between 6-18 months, most consumers of the product have decided against the need to buy in bulk.
One this is for certain, the cost of transportation will almost certainly continue to rise until the impact on our environment can be controlled effectively.
Having been involved as a leading consultant engineer within the refuelling equipment sector for over a decade with over half served of this term in first hand AdBlue product development, the author has massively influenced the UK Market.