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The urea water solution production line at a factory run by Lotte Fine Chemical, which accounts for more than half of the urea water solution market in Korea, sits at a standstill on Monday amid an ongoing scarcity of urea. (provided by Ulsan Metropolitan City)

On Thursday, the South Korean Ministry of Environment and Ministry of Trade, Industry and Energy announced emergency supply adjustment measures to stabilize currently scarce supplies of urea and urea water solution.

According to these new measures, urea water solution will only be available for purchase at gas stations, and purchases will be capped at 10 liters for regular automobiles and 30 liters for freight vehicles, vans, and construction and farming machinery.

Urea water solution is used in vehicles with diesel engines to cut exhaust emissions.

A tariff rate of zero percent will also be applied to industrial urea and urea water solution imports through June 2022 under a tariff-rate quota system.

The measures are to take effect immediately, the ministries said.

With the emergency measures in effect, those importing, producing, or selling urea or urea water solution will need to notify the government of their daily unit prices and inventory by noon Friday. The government will be able to issue production, supply and delivery orders to businesses and determine selling methods.

The government plans to implement the emergency measures from Friday through the end of the year, with the possibility of extension as needed.

Urea water solution sales will be restricted to gas stations in a measure to prevent hoarding through supermarket and e-commerce purchases. Exceptions are to be recognized in cases where sellers establish direct supply contracts with specific customers, including construction sites and large-scale transportation companies.

The amount of urea water solution available for purchase per vehicle is also to be restricted.

The restrictions are to be waived in cases where sellers directly fuel vehicles as needed. Purchasers of urea water solution for vehicles are barred from reselling the solution to third parties.

The government is also lowering the tariff rate for industrial urea and urea water solution to zero from its current level of up to 6.5% under its tariff-rate quota system.

The tariff-rate quota system is one in which tariff rates for imports can be temporarily raised or lowered. With the new measures, industrial urea and urea water solution that are subject to import notification between Friday and June 30 of next year can be supplied domestically without any tariff imposed.

The government added that it plans to rigorously enforce the law when it comes to those in violation of the emergency supply adjustment measures. According to the Price Stabilization Act, those who fail to report workplace conditions or other violations of emergency measures may face up to three years in prison or fines of up to 100 million won (US$85,000).

By Kim Jeong-su, staff reporter

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