SHORTAGE OF DIESEL EXHAUST FLUID

[Anchor Lead]

The shortage of diesel exhaust fluid for trucks is getting worse by the day. Related agencies held an emergency meeting on Tuesday. Contingency measures discussed include using other industrial grade urea for now, but resolving the shortage appears unlikely. Why is only Korea experiencing this problem? We take a look.

[Pkg]

Diesel exhaust fluid is running short at numerous gas stations. The situation is getting worse.

[Soundbite] Lee Bong-ki(Truck driver) : "No one knows when the fluid will be available. My truck will stop running in 2-3 days."

There are some 2.1 million diesel cars that cannot run without DEF, possibly leading to a logistics crisis. The government convened an emergency meeting. The option of using industrial grade urea solutions was mentioned but it’s viewed as unrealistic as the components are different from DEF. Also, there isn't an abundant supply of industrial urea. The best way would be for China to ease export restrictions but discussions are at a standstill.

[Soundbite] Lee Ji-yeon(Shinyoung Securities) : "The shortage is expected to be aggravated due to growing scarcity of coal."

South Korea is 97% reliant on China for DEF imports. Beijing's export curb imposed to protect domestic supply is dealing an immediate blow to Seoul. South Korea has not been producing its own product for a decade due to cheap imports.

[Soundbite] Kim Gyeong-hun(Korea Int’l Trade Association(KITA)) : "A state-level supply chain control tower should be established to manage risks on items closely related to daily life."

The government seeks to request China’s cooperation through various diplomatic channels. A worst case scenario of prioritizing the use of DEF exclusively for essential trucks and fire engines is also being considered.