Machinery Chatter
Russ Quinn DTN Staff Reporter

Monday 11/26/12

Industrial Urea and DEF

Recently I attended the 2012 Fertilizer Outlook and Technology Conference in Philadelphia. This annual meeting is put on by The Fertilizer Institute and the Fertilizer Industry Round Table and this was my third time attending this very informative set of meetings.

Among the presenters the first day was Monica Baker, a research manager for Integer Research based out of London. Her presentation was titled "An Overview of Industrial Urea Markets: Applications and Opportunities."

I will be honest here. My first thought when they announced her talk was, "What do I care about industrial uses for urea?" I am here to learn about fertilizer and to find topics to write on, what could industrial urea offer to me?

Well, turns out, more than I ever imagined.

Baker pointed out that the industrial urea market is only about 11% of the total global urea use, a tiny fraction compared to the fertilizer use of urea. For many years, the biggest application for industrial urea was resins and adhesives in wood working industries.

Other uses included animal feed (a side note here -- on the farm I am currently feeding our cows liquid protein and the feed guy warned me not to let the cow eat too much of the feed because the risk of urea poising) and also for medicines and cosmetics.

One more application began to emerge in 2010, she said. The demand for industrial urea in North America as an environment control has boomed over the last couple of years. This is because several governments have mandated that nitrogen oxides (NOx) be reduced in engine exhaust.

The one method of controlling diesel engine exhaust is to treat the exhaust with a fluid right before it is released into the environment to lower the pollutants in the exhaust. The fluid is called diesel exhaust fluid (DEF).

Those in agriculture are well aware of the push to control emissions in farm machinery. The years 2010 to 2014 mark the move from Tier 4 interim to the Tier 4 final and farm equipment manufacturers have been building machinery with diesel engines the last few years with these new technologies to control emissions.

And it is not just ag machinery; it has on-highway applications, other off-highway applications such as construction and mining machinery, stationary applications (power plants, cement factories, industrial boilers, waste incinerators, etc.) and even marine applications.

One interesting thing I learned from Baker's talk was all ships and ocean-going vessels will have the Tier 4 regulations by 2016 for all U.S. flagged vessels. I didn't know that.

Industrial urea is used to make (DEF). Those with newer tractors/combines/trucks may now have firsthand experience with DEF. Newer engines have a second tank, this one for DEF, in which the operator has to fill as one would fill the fuel tank.

The DEF supply infrastructure has also developed over the last couple of years with retail pump locations springing up all across North America. Baker speculated more permanent retail locations have helped to speed up the demand for DEF.

She showed a very interesting bar graph with the urea consumption into DEF in the USA. The first year was at the left on the chart (2010) and the bar was just about at around 25,000 tons. She had the year 2015 on the right side and she was forecasting for the U.S. to consume closer to 750,000 tons of urea for DEF.

Needless to say, I am no market analyst, but that was a very large jump in a short amount of time. This chart included light duty pickups, off-highway equipment and larger on-highway trucks.

Baker said she expected environmental uses for industrial urea to continue to grow as the largest demand driver for many years to come as other countries across the globe enforce legislation and standards to control engine emissions.

So I went to a fertilizer meeting and learned a little something about industrial urea and DEF. And I got a Machinery Chatter blog entry out of it too!

Posted at 1:17PM CST 11/26/12 by Russ Quinn
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