Maintaining Our Supply of Diesel Exhaust Fluid Program

Modern diesel engine technology will not operate without Diesel Exhaust Fluid (DEF). It is used to control nitrogen oxide pollutants which are harmful to human health and the environment. DEF is manufactured by blending Technical Grade Urea (TGU) with de-ionised water.

Australia is reliant on imports of TGU from the global market for the domestic production of DEF. In late 2021 and early 2022, global supply pressures highlighted limited flexibility in the TGU market in Australia. This had the potential to cause harmful economic impacts through disruption of Australia’s diesel dependent transport and logistics system – in particular heavy trucking and other modern diesel engines that require DEF to operate.

The competitive grants program is one of three measures the government is implementing to enhance the resilience of the DEF market. The other two measures include:

• a government controlled strategic stockpile of 7500 tonnes of TGU providing an additional five weeks of supply beyond industry stock levels in case of a supply shortage
• a system for collection and publication of data provided by industry to improve market transparency.

The objectives of the competitive grants program are:

• to support sovereign capability in manufacturing to produce TGU for the domestic DEF market in the period 2023 to mid-2026  
• produce TGU that is compliant with the ISO 22241 specification for the production of DEF, or as certified by Original Equipment Manufacturers (OEMs) for use as a DEF.

The grant amount will be up to 50 per cent of eligible project expenditure (grant percentage).

There is no minimum or maximum grant amount, but grants cannot exceed $16.15 million of available funds.