[New Blue] ,China's AdBlue®/DEF Fluid Industry Welcomes Good News Again

Automotive Urea Solution(AdBlue®/DEF Fluid) is an essential product for treating diesel exhaust from trucks and non road mobile machinery. With the strategic implementation of China's "Blue Sky Defense War" and "Dual Carbon" goals, as well as the comprehensive implementation of the "National VI" emission standards for commercial vehicles and the "National IV" emission standards for non road machinery, its market size is in a period of rapid development.

According to publicly available data, the usage of Automotive Urea Solution(AdBlue®/DEF Fluid) was approximately 8 million tons in 2021. The market size is expected to increase by 34.7% year-on-year in 2023, and is projected to reach 25 million tons by 2025. Rapid growth and large scale will be the development characteristics of the Automotive Urea Solution(AdBlue®/DEF Fluid) market for a long time to come.

The development of the Automotive Urea Solution(AdBlue®/DEF Fluid) market is closely related to the truck and non road mobile machinery markets.

On July 25, 2024, the National Development and Reform Commission and the Ministry of Finance of China issued a notice on "Several Measures to Strengthen Support for Large scale Equipment Renewal and Consumer Goods Trade in".

The third article of the first part of the notice is "Support for scrapping and updating old operating trucks". Support the scrapping of operational diesel trucks with emission standards of National III and below, and accelerate the upgrade to low emission trucks. Scrap and replace qualified trucks, with an average subsidy of 80000 yuan per vehicle; Only update and purchase eligible trucks without scrapping, with an average subsidy of 35000 yuan per vehicle; Only old operational diesel trucks will be scrapped in advance, with an average subsidy of 30000 yuan per vehicle.

The fourth article of the first part of the notice is "raising the subsidy standards for scrapping and updating agricultural machinery". On the basis of the Notice on Intensifying Efforts to Continuously Implement the Subsidy Policy for Scrap and Renewal of Agricultural Machinery, various standards for scrap and renewal of non road mobile machinery have been clarified.

On July 30th, the Ministry of Transport and the Ministry of Finance jointly issued the "Notice on Implementing the Scrap and Update of Old Operating Trucks" to update the subsidy standards. Among them, the subsidy standards for early scrapping of old operating trucks and the purchase of new National VI operating trucks are calculated according to the "Scrap and purchase of National VI emission standard operating diesel trucks subsidy=early scrapping of old operating diesel trucks subsidy+purchase of National VI emission standard operating diesel trucks subsidy". The subsidy for newly purchasing medium-sized National VI emission standard operating diesel trucks is 25000 yuan, the subsidy for 2-axle heavy trucks is 40000 yuan, the subsidy for 3-axle heavy trucks is 55000 yuan, and the subsidy for 4-axle and above is 65000 yuan.

The implementation of the policy of scrapping and updating trucks and non road machinery will significantly increase the market share of trucks and non road machinery with higher emission standards, directly leading to an increase in the consumption of urea solution for high-speed vehicles. Taking National VI heavy-duty trucks as an example, in order to meet the National VI standards for exhaust emissions, more Automotive Urea Solution(AdBlue®/DEF Fluid) needs to be consumed. Compared to National V vehicles, the consumption of Automotive Urea Solution(AdBlue®/DEF Fluid) is nearly doubled.

New Blue Environmental Protection is the largest private Automotive Urea Solution(AdBlue®/DEF Fluid) service enterprise in northern China, participating in the drafting of the "Group Standard" for Automotive Urea Solution(AdBlue®/DEF Fluid). The enterprise and its products have passed multiple international industry standard system certifications such as VDA, IATF, CGT&CAP.