Rentech Nitrogen Partners, L.P. (NYSE:RNF) today announced that it has completed the diesel exhaust fluid (DEF) system portion of its previously announced urea/DEF expansion project at its nitrogen fertilizer plant in East Dubuque, IL.
The DEF system was completed ahead of schedule, and it included the installation of mixing, storage and load-out equipment for DEF production. The second phase of the project, to increase urea production capacity by 13% or 17,500 tons annually that will be used for the production of DEF, is on schedule to be completed by the end of this year. The total capital budget for the urea/DEF project remains approximately $6 million and is fully funded.
DEF is a high-purity urea solution composed of de-ionized water and prime urea. As part of the Clean Air Act, the U.S. Environmental Protection Agency has mandated that all on-road diesel vehicles (class I through class 8) manufactured on or after January 1, 2010 employ an emissions-reducing engine technology which specifically targets hazardous nitrous oxide (NOx) emissions. The market leading solution for heavy-duty vehicles to comply with these stricter emissions standards is selective catalytic reduction (SCR), which involves injecting DEF into the exhaust of vehicles and achieves NOx reductions in excess of 90 percent. The U.S. market for DEF is projected to grow from 50 million gallons in 2010 to 1.3 billion gallons in 2019.
The completion of this phase of the expansion allows Rentech Nitrogen to expand its product offerings to include DEF, an industrial high-purity urea solution, which sells at a premium to urea used for agricultural purposes. Yara North America Inc., a leader in the DEF market, has entered into a long-term agreement with Rentech Nitrogen for the exclusive rights to purchase and distribute the quality DEF produced at Rentech Nitrogen’s facility under Yara’s Air1® brand.Completion of the DEF phase has enabled Rentech Nitrogen to convert a portion of its existing prime urea stream into high-quality DEF, which is being sold to Yara. Once the urea expansion at Rentech Nitrogen’s plant is completed later this year, the additional 17,500 annual tons of prime urea production will also be used to produce DEF for sale to Yara.