Government Increases Automotive Urea Stockpile From 54 to 70 Days

Key Takeaways

The South Korean government is bolstering its automotive urea stockpile and diversifying import sources to ensure stable supply.
Current imports are limited to three countries; plans include securing imports from the Middle East and Europe.
Budget allocations for stockpiling and support for import diversification will increase from approximately 3 billion won to up to 5 billion won.

Government Initiatives for Urea Supply Stability

The South Korean government is taking proactive measures to stabilize the supply of automotive urea, crucial for vehicle emissions control, amid concerns over past supply chain disruptions linked to China’s export restrictions. During a recent Supply Chain Stabilization Committee meeting, Minister of Economy and Finance Choi Sang-mok outlined the strategy for managing the future uncertainties regarding urea supply and demand.

The government anticipates a continual rise in demand for automotive urea until the mid-2030s. However, the nation currently relies on a limited number of suppliers from only three countries: China, Vietnam, and Japan. In light of this dependency, officials evaluated two main avenues for enhancing supply stability: increasing domestic production or expanding stockpiling and diversifying imports. After thorough analysis of the impacts, costs, and policy adaptability, expansion of stockpiling and broadening of import sources were deemed the more effective approach.

The plan includes increasing the urea stockpile through the Public Procurement Service, which will acquire urea and store it in private warehouses. The government will provide financial support for storage costs, allowing the current reserve—sufficient for 54 days—to be increased to 70 days. This initiative has an estimated budget of between 1 billion and 2 billion won.

Additionally, the government aims to broaden its import sources to include regions like the Middle East and Europe. This plan involves enhancing subsidies for import price differences, which will cover part of the cost when sourcing from countries other than China. An initial investment of about 3 billion won for this subsidy program is set to grow to between 4 billion and 5 billion won in future budgets.

The government is committed to close monitoring of urea supply trends, with plans to consider these factors in the budget proposal for 2026.

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