On December 29, 2011, the National Environmental Protection Department announced that as of July 1, 2013, all production, import, sale, and registration of vehicles with compression-ignition engines must comply with China IV emission standards. This led to widespread discussions about issues affecting the implementation of China IV standards. Adblue (urea solution), as a key consumable in the Selective Catalytic Reduction (SCR) post-treatment system — the mainstream solution for achieving China IV emissions — had its supply issues become one of the focal points. For this reason, our editor interviewed relevant enterprises.
Delay of China IV was Expected, Short-term Impact is Minimal
Mr. Luo Tong, Director of Domestic Sales and Technology at Yara Sinochem, stated: "Overall, the postponement of the China IV timeline has not affected Yara Sinochem's business (Adblue). From the perspective of market development, there must be a period after the policy is implemented before the vehicle denitrification agent (Adblue) market can be widely utilized. We entered this market with ample preparation for its development, implementing it in stages. The delay was also something we anticipated."
Mr. Qin Jian, Operations Director at Keransu, also indicated that the delay would have minimal short-term impact because the market has not yet started, and there is still a year and a half to prepare. However, the long-term impact is significant; there is still much work to be done in the next one and a half years, such as increasing production capacity, building distribution channels, promoting low-temperature Adblue and solid urea. More crucially, due to the repeated delays in the implementation of the China IV standard, which seemed endless but gradually became clear, it gave enterprises in the industry some confidence, as if they "saw the light at the end of the tunnel."
Supply, Technology, and Distribution Channels for Urea are Not Issues
There were previously concerns from industry insiders about the lack of urea refueling stations, and the reporter personally received similar calls for help.
On December 29, 2011, Mr. Wu from LG Group called the reporter to find a refueling point for urea solution for the company's five Yutong buses.
Regarding this issue, Mr. Luo Tong said: "The lack of refueling stations is indeed a reality; after all, there are too few Euro IV vehicles currently. There needs to be a balance between investment and output, similar to the chicken-and-egg problem." When discussing the construction of refueling stations, he mentioned various ways to build them, including cooperation with gas stations. In Europe, Yara has experience in this area, investing in station construction and partnering with oil companies. Moreover, refueling stations are just one way to supply urea solutions. For large customers like truck and bus companies and fleets, dedicated refueling stations (points) can be built, with specialized Adblue trucks responsible for regional replenishment. Currently, Yara has established good cooperation relationships with international commercial vehicle giants such as Volvo, Mercedes-Benz, MAN, and Scania. Recently, Yara International and Scania announced a global cooperation agreement for AdBlue supply, reportedly the first global agreement signed between a heavy truck manufacturer and an AdBlue supplier for the aftermarket.
Mr. Luo Tong emphasized that since most of the urea solution is water, the cost of long-distance transportation is high. Therefore, Yara Sinochem, in collaboration with Sinochem Group, is laying out new factories domestically. For more truck and bus users, small-packaged 10-liter drums are very popular due to their convenience and ease of refueling, making it the world's largest supply method.
Keransu has also done extensive work in the production, technology research and development, and sales network construction of urea solutions.
Mr. Qin Jian told reporters that Keransu's annual production of urea solution is 1.2 million tons, with plans to increase capacity to 1.6 million tons by July 1, 2013. Technologically, Keransu has developed low-temperature urea and solid urea, with two products suitable for temperatures of minus 25 degrees Celsius and minus 35 degrees Celsius, providing more choices for China IV vehicles in extremely cold regions. Additionally, since 2010, Keransu has successfully developed four types of refueling equipment suitable for various urea solutions, gaining recognition from companies like FAW and Dongfeng Motor Corporation.
Furthermore, Keransu will vigorously expand its sales network and channel construction, focusing on both group clients and social channels. Keransu already supplies urea solutions to well-known automotive enterprises such as Yutong Buses and Beijing Automotive Group.
As Chen Xiaoxing, the sales manager of Longpan Lubricants, part of the Keransu family, told reporters, Keransu's urea products can be sold entirely through Longpan Lubricants' distribution channels. Currently, there are 300 to 400 sales outlets nationwide, covering provincial capital cities, with plans to continue expanding based on circumstances.
Hubei Jiangnan Dongfeng Special Automobile Co., Ltd. is a designated production plant by the National Development and Reform Commission, the only fire truck production qualification factory in the special automobile capital by the Ministry of Public Security Fire Bureau, and a supporting modification plant of Dongfeng Automobile Company. The main products produced and sold include fire trucks, tow trucks, aerial work platforms, wing-opening box transport vehicles, water sprinklers, fuel tankers, chemical liquid transport vehicles, flatbed transport vehicles, mobile power vehicles, garbage trucks, and hundreds of other varieties. All models have been listed in the national announcement directory, obtaining ISO9001-2000 quality management system certification, and products have passed CCC certification.
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