The decision to pause construction of a $4.5 billion urea plant has raised questions about Australia’s long-term supply of urea, experts say.
On Thursday, Federal Environment Minister Tanya Plibersek asked Perdaman Chemicals and Fertilisers to pause work on its urea plant in Western Australia’s Pilbara region, while she considered appeals from Traditional Owners over damage to ancient rock art.
Grain Producers Australia chief executive Colin Bettles said the pause would not have any immediate effect on Australian grain growers, but it raised questions about Australia’s future urea supplies.
The project was scheduled to start production in 2025, and was expected to produce 2.3 million tonnes of urea a year – about 96 per cent of the urea Australia currently imports.
Mr Bettles said the social and environmental reasons behind the decision to pause the project “made sense, to make the right assessments”, but he urged the Australian government to do more to increase local manufacturing of fertilisers.
He said Australian grain producers were concerned about their reliance on internationally sourced fertilisers, which have risen steeply in price as a result of disruptions to global shipping and Russia’s invasion of Ukraine.
Australian grain producers have paid record high prices for urea this year, about 90 per cent of which is imported.
“What’s happening in the fertiliser market now with growers paying higher prices than average has been frustrating, and we’re hoping that other supply can come online at some stage in the future,” Mr Bettles said.
“We’re encouraging governments to do all they can to increase the local manufacturing of Australian-made input products, to help make farmers and rural communities more resilient and sustainable, in particular green fertilisers, where there’s an opportunity to help reduce (greenhouse gas) emissions.
“Australia is already leading the world in emissions reductions with grain production. We want to see more work put into that space to help mitigate supply risks, and reduce costs to growers."