GreenChem predicts further AdBlue price increase

GreenChem, Europe’s leading supplier of AdBlue - the urea-based solution needed by most truck and bus diesel engines to achieve the latest Euro 4 and 5 emissions regulations, is predicting a further increase in the price of AdBlue. This follows a sharp increase in the price of urea which will affect all suppliers of AdBlue.

“The price of our basic raw material has climbed steeply in recent weeks and we – and other suppliers – will have no alternative to passing the increase on to our customers”, says GreenChem’s Founding Chairman, Teun de Bruijn. “However, the increase in AdBlue pricing will be much lower than fleet operators are facing for their diesel fuel so the impact on operating costs will be very low”

Mr de Bruijn added: “Not only is the price increase over a period of time much smaller than that for diesel but the consumption of AdBlue is still only very small in comparison to diesel. So from that perspective, SCR* technology has become more and more attractive, despite the expected price increase of AdBlue”.

Mr de Bruijn forecasts that AdBlue prices in the market will go up in the next few months – one of GreenChem’s competitors has already implemented a price increase – meaning that operators who shop around in the next few days may be able to obtain supplies at a lower price.

According to generally available market indices, the cost of urea has risen by almost 50% since the beginning of 2008. The price of urea had already increased since one of the key elements in its production is natural gas. Gas prices have been rising for several years, in line with oil. Now there has been a further and significant increase on top of the earlier increases.

Urea prices have also been impacted by two other factors: the increasing demand for food production worldwide but particularly in China (urea is a core ingredient of many fertilisers) and, ironically, the growing popularity for bio-diesel which also relies on urea as a key component.

The overall urea price increase since the beginning of 2008 was already enough reason to justify a rise of approximately 3 Euro cents (about 2.5p) per litre of AdBlue on top of the price increase announced by GreenChem in January.

Now another incident causes even more uncertainty: the devastating earthquake in China which has cut urea production capacity there by around 4 million tonnes. China will have to seek even more supply from abroad and it is unclear what this will mean for urea prices, although it must be expected that they will rise further, with a direct effect on AdBlue prices.