Storage and management of the Commonwealth-owned stockpile of Technical Grade Urea (TGU)

Summary and scope

The Australian Government is committed to keeping our economy moving and for our trucking and agriculture industries, this means having a reliable supply of DEF. The Department, on behalf of the Commonwealth of Australia, will extend the government-owned 7,500 tonne TGU stockpile. The TGU stockpile was first established in December 2022, and a supplier was contracted to manage the purchase, storage and turnover of the stockpile. The contract with the current supplier is due to expire on 30 June 2026. The stockpile was established to be stored domestically and made available for the production of DEF in the event of a national TGU supply disruption. The stockpile is only to be used in an emergency situation where stocks across the domestic industry are depleted. Modern truck engines cannot operate without DEF. Ensuring DEF supply is critical to the operation of the Australian transport and logistics industry. Approximately 24 per cent of transport heavy vehicles require DEF to operate. There is no production of TGU in Australia, and we are 100% reliant on imported TGU. A strategic TGU reserve equivalent to five weeks' consumption of DEF provides certainty to market participants. The stockpile assists in preventing panic buying and hoarding caused by market uncertainty. Additional funding was agreed to in MYEFO 25/26 to extend the stockpile to 30 June 2030.