Value context and insight. lkm@koreatimes.co.kr
'Diesel exhaust fluid' hoarding to be prohibited
People wait in line to buy 'diesel exhaust fluid' (DEF) in Iksan, North Jeolla Province, Thursday, Yonhap
By Lee Kyung-min
Little efficacy expected from gov't move to allow sharing of key transport agent in stock for industrial use
By Lee Kyung-min
An executive order prohibiting hoarding of “diesel exhaust fluid” (DEF) solution, a critical agent needed to reduce air pollution from diesel vehicles, will take effect next week, the government said Thursday. Locally termed “urea water,” it is a nontoxic solution of 67.5 percent purified water and 32.5 percent ultra-pure automotive grade urea.
The government seeks to bring under control a recent rush of attempts to sell the fluid additive at up to 20 times the buying price, in what it deems a criminal manipulation of the market.
A taskforce set up by the environment ministry, the Fair Trade Commission, the National Tax Service and Korea Customs Service will monitor and clamp down on any irregularities and draw up measures to help stabilize the domestic supply.
The hastily arranged measure is part of efforts to forestall a transportation crisis brought on by up to 2 million freight diesel vehicles which will be unable to operate with the key agent running in short supply due to sudden export curbs from China. Some of the newest diesel vehicles cannot start without the agent.
China began conducting a pre-export inspection on goods produced within its borders Oct. 15, a key part of its export curbs imposed amid a trade conflict with Australia. The dispute came after China refused to import coal, from which urea is extracted, produced in Australia which faulted China for the COVID-19 pandemic.
Most large local DEF manufacturers shut down around 2013 and Korea has since relied almost exclusively on China for the cheap material. A whopping 97.6 percent of Korea's imports of the agent permitted for industrial use came from China in the first nine months of this year.
Gov't measures
First Vice Finance Minister Lee Eog-weon said the government will enact and implement an executive order next week to prohibit the sale of the agent, as authorized by relevant laws governing the stability of prices.
“The government will sternly crack down on attempts at seeking undue profit in times of crisis, while closely monitoring changes in supply and demand in cooperation with related ministries,” he said during a review of macroeconomic market developments held at the Korea Federation of Banks in Seoul.
The announcement came after reports of 10 liters of urea water being traded online for 200,000 won ($169), 20 times the usual price of about 10,000 won. Also rushing in are a number of fraud schemes involving requests for wiring of cash and takes the money and disappears.
The trade ministry is considering converting the existing DEF permitted only for industrial use to make it suitable for vehicles.
The ministry has identified the amount of the agent currently stockpiled for industrial use including manufacture of steel, thermal power and cement.
The amount cannot cover the ongoing shortage, being barely enough to meet the current industrial demand.
Whether the amount will be fully converted for vehicles in time remains uncertain, since it will need a significant amount of time to upgrade the low-quality material.
The environment ministry is conducting a technical review on whether the amount converted can be approved for use in vehicles. The results will be announced later this week or early next week.
“We will begin supplying the converted amount as soon as the environment ministry gives its go-ahead,” a trade ministry official said.
The Ministry of Foreign Affairs said it is seeking to remedy the matter through a variety of diplomatic channels, making requests to China to proceed with more prompt pre-export inspection procedures.
“We are delivering our opinions on the need for the inspections at an expedited rate before export among other requests,” a foreign affairs ministry official said during a press briefing, Thursday.
Continued government assistance is being provided by diplomatic missions in China including the Korean Embassy in China for speedy inspection of imports as agreed to before the feud between China and Australia.