The Australian Trucking Association has called for Australia to replace no more than five per cent of its liquid fuel supply with low-carbon fuel by 2035, warning that more ambitious targets could increase costs and create technical risks for heavy-vehicle operators.
Responding to the Federal Government’s consultation paper on securing Australia’s cleaner fuels industry, ATA CEO Mathew Munro said the transition needed to balance emissions reduction with affordability, fuel security and compatibility with existing truck engines.
“Australia is one of the world’s great energy exporters, but we are heavily reliant on imports of crude oil and refined petroleum products,” Munro said.
“Our submission aims to balance the objectives of affordability, resilience, reducing carbon emissions, usability in today’s truck engines and the opportunity to create new industries.”
The Government’s consultation paper canvasses targets that could reach 20 per cent. However, the ATA argues that achieving this level by 2035 could substantially increase fuel prices and leave Australia dependent on imports of refined low-carbon fuels or the feedstocks needed to produce them locally.
For fleet operators, the ATA’s preferred five per cent target reflects concerns about the availability, cost and suitability of alternative fuels for the existing heavy-vehicle fleet.
ATA warns against higher biodiesel blends
The ATA has also recommended that biodiesel not be included in the proposed low-carbon fuel mechanism.
According to truck manufacturers represented on the ATA’s Industry Technical Council, modern truck engines are generally designed to operate on fuel complying with Australia’s diesel fuel quality standard. That standard restricts biodiesel content to five per cent.
“Using blends greater than five per cent would adversely affect the durability of both engines and fuel systems, and likely void engine warranties,” Munro said.
This would create a significant risk for fleets if fuel policy encouraged the wider supply of blends that were not approved by vehicle manufacturers. Potential consequences could include higher maintenance costs, reduced asset life and disputes over warranty coverage.
The ATA also warned that investment in conventional biodiesel production could become stranded as more advanced low-carbon fuels become commercially available.
It has instead highlighted renewable diesel as a more practical option for the heavy-vehicle sector. Although renewable diesel and biodiesel can be produced from similar feedstocks, they use different production processes.
Renewable diesel is considered a drop-in replacement for conventional diesel, allowing it to be used in suitable existing vehicles and refuelling infrastructure without the same blending restrictions associated with biodiesel.
Electrification should earn credits
The ATA wants the proposed mechanism to provide non-fuel credits for measures that reduce transport emissions, including investment in electric vehicle charging infrastructure.
Munro pointed to comparable schemes in California and Canada that recognise emissions reductions achieved through measures other than substituting one liquid fuel for another.
“Including measures like electrification in the scheme would reduce the per-tonne cost of lowering carbon emissions,” he said.
“It is cheaper to electrify than use renewable diesel in applications where electric vehicles are technically and operationally suitable.”
For heavy-vehicle fleets, this reinforces the need for a mixed approach to decarbonisation. Battery-electric trucks may be well suited to predictable metropolitan routes, depot-based operations and applications with reliable access to charging.
Renewable diesel could play a complementary role in long-distance, remote or high-utilisation operations where electrification is not yet technically or commercially practical.
A credit mechanism that recognises charging infrastructure could also encourage fuel suppliers and other market participants to support the rollout of heavy-vehicle charging networks.
Regional fuel storage remains a priority
The ATA has separately responded to the Government’s proposed fuel security and resilience package.
While supporting the measures outlined in the package, it said they should not be treated as the final step in strengthening Australia’s fuel security.
The association wants Australia to work towards its International Energy Agency obligation to maintain emergency fuel reserves equivalent to 90 days of net fuel imports.
It has also called for greater attention to smaller fuel-storage locations throughout regional Australia, including storage based at road transport businesses.
“The land and construction capacity constraints at major storage sites should be addressed with a complementary focus on supporting smaller storage locations across the fuel supply chain in regional Australia,” Munro said.
The Livestock, Bulk and Rural Carriers Association has lodged a separate submission detailing how regional storage could be planned, managed and funded.
For trucking businesses, the two consultations are closely connected. Low-carbon fuel policy will influence the price and types of fuel available, while fuel-security measures will determine how reliably those fuels can be supplied—particularly to fleets operating beyond major metropolitan areas.
