AdBlue
Over the past two years, the Ukrainian AdBlue market has undergone a major transformation. The country is gradually reducing its once complete dependence on imports through domestic production. TIZ-Carbogas is among the four Ukrainian companies that have already received a licence to produce AdBlue from the German Association of the Automotive Industry (VDA). With extensive experience in manufacturing equipment for the storage and transportation of CO2, the company's engineers have designed their own urea plant in Lviv region, which was visited by Naftogaz.
TIZ-Carbogas came to the idea of producing its own AdBlue gradually. At first, the company bought it as a consumer for its vehicle fleet. Later, it started importing the product from Lithuania and Poland in bulk and selling it on the Ukrainian market. The last stage was the construction of a plant in the village of Murovane near Lviv with a maximum production capacity of 2,000 tonnes per month and the obtaining of a licence from the German Association of the Automotive Industry (VDA), which holds the rights to the AdBlue trademark. The company currently produces approximately 400 tonnes of the reagent per month.
Reference Oil Market
TIZ-Carbogas was founded in 2005. Initially, its main business was the import of carbon dioxide to Ukraine. Over time, the company began to manufacture CO2 storage equipment and install it for its customers, mainly in breweries or greenhouses. Today, TIZ-Carbogas is one of the largest traders in the market of CO2 and all its possible applications, as well as the only manufacturer of tanks for storing and transporting carbon dioxide in Ukraine. As you know, carbon dioxide is stored under high pressure and is used to produce carbonated beverages, increase the yield of various crops in greenhouses and freeze food. TIZ-Carbogas' clients include such large companies as Sandora (PepsiCo), Obolon, Mykulynetsky Brovar, Poltavpyvo breweries, Svalyava Mineral Waters and Shayan Mineral Waters, among others. Another priority for the company is the production and sale of dry ice using its own polytizer and cryogenic blasting.
Production
According to the company, the production of the reagent was launched in 2020. The company designed, manufactured and installed a significant amount of the necessary equipment on its own. "We have highly qualified engineers who did this. Of course, they had previously attended specialised exhibitions in Europe and studied the topic. When the VDA inspector saw our equipment, he was somewhat impressed, because it is unique," says Bogdan Shemelinits, Head of AdBlue at Tizinox.
TIZ-Carbogas received the VDA licence to produce AdBlue in June 2021 and now produces urea under the TIZINOX brand. The VDA licence certifies that the product complies with the international standard ISO 22241. "Each batch of TIZINOX products manufactured at TIZ-Carbogas undergoes a rigorous quality control process at all stages of production and is delivered to the end consumer after complete research required by ISO 22241," the company emphasises.
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Reference Oil Market
Diesel exhaust fluid is known as Diesel exhaust fluid (DEF) in the United States and AUS 32 in Europe and is sold under the name AdBlue. The German Association of the Automotive Industry (VDA) holds the rights to the AdBlue trademark. This fluid is used to reduce the amount of nitrogen oxides in diesel exhaust gases from vehicles equipped with a selective catalytic reduction (SCR) system. It is used in all trucks that meet Euro 4, Euro 5 and Euro 6 standards, as well as in Euro 6 cars.
Quality control
In preparation for the production of AdBlue, TIZ-Carbogas has built a reliable and modern quality control system, including the creation of its own laboratory that analyses raw materials and finished products in accordance with VDA standards. "The control is structured as follows. First, there is a three-stage water quality analysis, which is carried out daily before the start of the production process," says Solomiya Nesterivska, laboratory chemist at TIZ-Carbogas. "The water parameters are checked by the company's own laboratory, and a specialised laboratory conducts a reference analysis of deionised water before each batch of TIZINOX product is produced." The quality of the raw material - grade A urea - is analysed separately upon receipt of each batch, says Nesterivska.
The TIZINOX (AdBlue) reagent is produced in two stages according to a process developed by the company. The first stage produces a "crude product" in the reactor, the quality of which is controlled. If the raw product meets the standards, the final production process is started, which results in a product ready for use in cars - AdBlue. To ensure that the characteristics of this product fully comply with the passport data, a two-stage thorough examination is carried out - laboratory control at TIZ-Carbogas and samples are sent to Kyiv - to the Kundiev Institute of Occupational Medicine of the National Academy of Medical Sciences of Ukraine. "They analyse the metal content using an atomic emission spectrometer," says Solomiya Nesterivska, "We analyse the product for other parameters such as concentration, refractive index, density, phosphate, biuret, aldehydes, insoluble residue and others in our own laboratory.
Only then does the company issue a quality certificate for the batch, and the AdBlue is filled into containers, sealed and shipped. "The quality control system is designed in such a way that we can trace the entire production chain: we know from which batch of raw materials the finished AdBlue in each particular cube is made," says Nesterivska, "and we also track when and from which batch the product is delivered to customers. The company keeps product and raw material samples from each batch for six months. With each delivery of the product, the customer is provided with a memo on storage conditions, handling and requirements for the appropriate packaging.
For its part, the VDA, according to the licence agreement, can take product samples and analyse them at any time without notice.
Sales
"TIZ-Carbogas supplies TIZINOX in IBC cubes or tankers for loading into customer containers using its own vehicles. The company does not currently pack AdBlue in canisters, although it has experience in doing so. According to Mr Shemelinets, deliveries in canisters are not a priority, as logistics eats into margins on small batches of product. TIZ-Karbogaz sells most of its products in Ukraine, but some volumes of TIZINOX are exported to Romania and Hungary, added Shemelinets.
TIZ-Carbogas has developed another original solution for petrol stations - an AdBlue retail unit. It consists of a reagent dispenser that connects to the cash register and a ground storage tank. "The portable and ergonomic design makes it possible to install the module anywhere and replace it at any time," the company says.
The company has been producing such units for more than six months, but in small quantities, Bohdan Shemelinits told NR. According to him, they are currently installed at some Amic petrol stations. "A robust tank with an insulated outer coating protects the product inside from excessive heat and cold, while small dimensions and high filling capacity ensure ease of use and time savings," he said. Each module is equipped with an electronic meter of high measurement sensitivity.
TIZ-Carbogas is currently leasing these modules to petrol station operators on the condition that they buy from AdBlue. At the same time, Bohdan Shemelinits does not rule out that the company will start selling them in the future. At the end of this year or in early 2022, TIZ-Carbogas plans to increase its capacity to produce modules for AdBlue retail sales.
However, modules with a dispenser are not cheap, so they are not suitable for all customers. The bulk of the company's customers are mainly transport companies that buy the reagent for their own vehicles. For such customers, a container with a hose and a gun is enough to fill the car with AdBlue. In addition, TIZ-Carbogas has supplied some Mango petrol stations with low-cost equipment, which consists of a tank with a gun and a counter that is not connected to the cash register, the company told HP.
Price situation
Currently, the minimum price for TIZINOX is 13 UAH/l with self-delivery when buying in bulk, although in August it was still 8 UAH/l, said Bogdan Shemelinits. According to him, since the beginning of the year, the price of urea has roughly doubled due to the rise in natural gas prices. Accordingly, the cost of the product is also rising.
It is worth noting that the launch of Ukrainian AdBlue has led to a drop in urea prices in our country and increased competition. In 2020, some importers were forced to reduce their prices for AdBlue as Ukrainian producers' offers became much cheaper. However, the rapid rise in natural gas prices in 2021, which accelerated in autumn, has significantly changed the situation. Now much depends on the prices at which nitrogen plants buy natural gas. Those with long-term contracts have an advantage. These companies sell urea at a lower price. According to Bohdan Shemelinets, some European AdBlue producers currently have an advantage in terms of access to cheaper grade A urea. At the same time, Ukrainian suppliers have a more convenient logistics advantage.