ACCC allows AdBlue collaboration to continue

The ACCC has extended its special authorisation for AdBlue manufacturers collaboration with industry participants to obtain supply of refined urea and prioritise distribution of refined urea and AdBlue should shortages emerge.

The ACCC has decided to grant authorisation until 1 December 2022 on the basis that the collaboration occurs in conjunction with the Australian Government.

On 22 December 2021, the ACCC granted an urgent interim authorisation to enable AdBlue industry participants to immediately commence the arrangements.

At that time, there was a global shortage of urea, and Australian AdBlue manufacturers were facing difficulties securing supply.

As AdBlue is critical to the operation of modern diesel engines, the shortage risked disrupting Australian supply chains and the economy more broadly due to disruptions it could have caused to sectors including road freight, mining, agriculture, energy and light vehicles.

The ACCC’s final determination says the Australian Government and AdBlue industry participants have implemented a range of measures to address the shortage, including the coordination that occurred, and continues, under the interim authorisation.

“As a result, the concerns about AdBlue supply have abated,” the report says.

The coordination that has occurred includes:

• discussions within the AdBlue supply chain to develop and implement strategies to assist the continued supply of AdBlue;
• providing more effective advice to governments and relevant agencies regarding the supply of AdBlue and identifying measures to address supply shortages and constraints that may arise; and
• maximising the efficient use of supply channels to reduce strain on the AdBlue supply chain.

The ACCC considers enabling coordination by AdBlue industry participants in the short term, will continue to assist in managing and mitigating any risks of an AdBlue supply shortage.

“The ACCC considers that this has, and will continue to, maximise the likelihood of businesses and consumers across Australia having reasonable access to AdBlue during any disruption in the supply of urea.”

In response to opposition to the arrangement, expressed by alternate suppliers the ACCC said it recognises the downsides to reduced competition.

However, the ACCC considers those impacts to be sufficiently limited during the temporary measure.

The coordination does not allow for any agreements about the price of AdBlue supplied to consumers.

“The ACCC is satisfied that the terms of the arrangement give the Australian Government adequate certainty, oversight and transparency,” the report says.