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On the 4th, a cargo truck is stopped at the Western Truck Terminal in Yangcheon-gu, Seoul, where the shortage of diesel vehicle urea solution, an essential element for diesel vehicle operation, is worsening day by day. The government is reviewing all necessary measures to ensure a stable supply of urea solution, including resuming exports through consultations with China, converting industrial urea for vehicle use, import substitution, and customs clearance support. / Photo by Moon Honam munonam@

[Asia Economy Reporters Changhwan Lee, Sangdon Joo, Jehun Yoo] The domestic automotive industry is facing a supply chain crisis due to a shortage of urea solution. Amid the ongoing shortage of vehicle semiconductors, the logistics disruption caused by the urea solution shortage has pushed the industry to the brink of another shutdown (Shut Down - temporary suspension of operations).

It is analyzed that not only finished car production but also the entire industrial sector including home appliances and essential consumer goods will fall under the influence of logistics paralysis within 1 to 2 weeks. The government, including the Ministry of Environment, is considering temporary regulatory relaxations related to urea solution, but their skeptical stance raises concerns that the golden time to act might be missed.

1 to 2 Weeks Left in the Urea Solution Golden Time, Growing Concerns Over Supply Chain Collapse

According to the industry on the 5th, multiple large corporations' internal reviews concluded that there is only 1 to 2 weeks left before logistics using freight trucks completely stops due to the urea solution shortage. The reality of logistics paralysis affecting all industries is approaching. Many companies are adjusting production plans by reducing output.

The automotive industry is experiencing a complete blockage in freight transportation carrying parts and new vehicles. A representative of an automotive partner company in the Seoul metropolitan area said, "The freight crisis caused by the urea solution shortage is making it difficult to secure vehicles," adding, "If this situation continues for just one week, the parts supply chain will completely collapse."

This is because in the automotive production system, even if one or two parts are not properly supplied, the entire assembly process can be disrupted. In the worst case, a shutdown is inevitable.

This year, the automotive industry has halted factory operations several times due to the shortage of vehicle semiconductors, and the vehicle delivery delays caused by the urea solution crisis are expected to extend further, prompting frantic efforts to resolve the situation. Exports are also at risk. If freight trucks stop operating, the route to the port for vehicle exports is effectively cut off.

The logistics paralysis caused by the urea solution supply shortage is spreading across the entire industrial sector. Courier companies have also been hit hard. Freight truck owners of major courier companies such as CJ Logistics and Hanjin are struggling to obtain urea solution, causing disruptions in both long-distance and short-distance operations.

A CJ Logistics agency union official said, "Large trailer trunk vehicles connecting regions are having difficulties securing urea solution," adding, "As logistics movement times lengthen at sub-terminals and delivery sites, consumers are also suffering."

The home appliance industry is also closely monitoring the situation. Home appliance companies like Samsung Electronics and LG Electronics deliver products in real time through large logistics companies, but they anticipate an emergency soon as land routes are expected to be blocked. A Freight Solidarity official warned, "Freight drivers are already avoiding long-distance trips, and after just one week, the logistics field will reach a paralysis level."

[Image source=Yonhap News]

Government Struggles to Prepare Measures, Environmental Pollution Concerns Over Regulatory Relaxation

The government is struggling daily to prepare countermeasures but is cautious because it believes that once air emission regulations related to urea solution are relaxed, it will be difficult to restore them to their original state.

The Ministry of Environment has expressed willingness to actively cooperate with the Ministry of Trade, Industry and Energy's urea supply measures but stated that it will first review the impact on air environment and public health of manufacturing industrial urea or urea solution for use as vehicle urea solution, and then decide on relaxing air pollutant emission standards in the industrial sector.

An official from the Ministry of Environment said, "Currently, most industrial sector workplaces emit only about 60% of the maximum allowable air pollutant emission standards, so it is not a situation where emission standards can be immediately relaxed due to the urea solution shortage," adding, "If the situation prolongs and relaxation is deemed necessary, we will review and take action at that time."

Meanwhile, the Blue House formed a urea solution response task force (TF) on the same day, led by the Chief of Economic Secretariat as team leader, with related secretaries from the Policy Office and National Security Office as team members. The TF will operate a daily emergency inspection system until urea solution supply stabilizes and will review major response achievements and discuss response plans by sector including economy, industry, land, agriculture and fisheries, climate environment, and diplomacy.

This content was produced with the assistance of AI translation services.