As Australia debates the future of heavy vehicle decarbonisation, Craig Lee, Executive General Manager – On-Highway at Penske Australia & New Zealand, believes the most practical emissions lever may not be hydrogen or battery electric trucks — but renewable diesel.
“It’s unsexy, because an engine still has a tailpipe,” Lee said. “But as far as actually reducing emissions, renewable diesel through conventional distribution methods works.”
While battery electric trucks and hydrogen fuel cell technology continue to attract attention, Lee argues the barriers to deploying those technologies at scale in Australia remain significant.
“The Australian market is unbelievably difficult in heavy transport to implement non-liquefied fuel technology,” he said. “The infrastructure required is absolutely prohibitive on scale.”
In contrast, renewable diesel — often referred to as HVO (hydrotreated vegetable oil) — can utilise existing internal combustion engines and the established fuel supply chain. Refineries know how to produce it, fuel companies know how to distribute it, governments know how to tax it, and operators know how to use it.
“All of that is in place today at a sunk cost,” Lee said.
Both of Penske’s prime mover platforms can operate on 100 per cent HVO, providing immediate emissions reductions without requiring new vehicle technology or large-scale infrastructure investment.
The blending capability is another practical advantage. Renewable diesel can be mixed with conventional diesel at varying percentages, gradually lowering the carbon intensity of the overall fuel supply.
“You can run a renewable at 20 per cent or 50 per cent, like we do today with ethanol,” Lee explained. “You rise the tide of the entire market.”
This approach allows fleets to reduce emissions across existing assets rather than relying solely on new vehicle replacement cycles. For operators managing tight capital budgets, that flexibility matters.
Lee acknowledges that renewable diesel is not without debate, particularly around feedstock sourcing and the balance between food and fuel production. However, from an operational perspective, it avoids many of the technical and logistical constraints facing alternative powertrains.
“Emergency services know what to do when the thing’s lying on the side of the road upside down,” he said, pointing to the familiarity and established safety frameworks around liquid fuels.
Government support is also emerging. Lee referenced recent federal announcements supporting investment in renewable diesel production, signalling that policy settings may begin to align with this transitional pathway.
Importantly, Lee does not dismiss battery electric or hydrogen technologies outright. He sees viable use cases in urban delivery and city bus applications. But for long-haul heavy transport operating across Australia’s vast geography, he remains cautious about the pace of transition.
“I’ve not seen an operator who has successfully gone to alternative technologies on any form of scale,” he said.
For fleets facing growing Scope 1 and Scope 2 reporting obligations, renewable diesel offers a commercially realistic step forward — one that can be implemented progressively without waiting for new infrastructure networks to mature.
In a sector where decarbonisation ambitions must coexist with freight reliability and cost control, renewable diesel may represent the bridge between aspiration and operational reality.
It may lack the headline appeal of zero-emission trucks, but as Lee suggests, the most effective transitional solutions are often the ones already within reach.
- Volvo’s Gas-Powered FH Aero Gains Momentum
Volvo Trucks has secured an order for 500 FH Aero gas-powered trucks from German transport company Reinert Logistics, highlighting growing European demand for renewable fuels in heavy-duty transport. The agreement was signed at the IAA Transportation exhibition in Hanover, with deliveries scheduled to begin in 2027. It follows Reinert Logistics’ experience operating an initial fleet - Expanded Hino 700 Series range drives surge in heavy-duty ordersHino Australia says an expanded 700 Series range has helped deliver a significant lift in heavy-duty orders as the company works to convince traditional light and medium-duty customers to consider Hino for more demanding applications. Hino Australia President and CEO Richard Emery acknowledged that the 700 Series had not previously achieved the market penetration the
- Do you really need 4×4? The fleet case for the NMS AWDWhen a fleet needs to leave sealed roads, the instinctive specification can be to jump straight to a 4×4. But not every council ute replacement, service truck or regional maintenance vehicle needs low-range gearing, high ground clearance and the compromises that can come with a more serious off-road platform. That is where Isuzu sees a
- Scania Builds China Base for Future TransportScania is establishing a new venture platform in China as it looks to tap into the country’s rapidly developing electric, autonomous and digital transport ecosystem. The truck manufacturer has launched Venture & New Business China (VNBC), which will focus on identifying, developing and piloting new business opportunities through partnerships with customers, technology companies and other
- FOTON Opens Flagship Truck Centre in SydneyFOTON Australia has unveiled its first flagship Commercial Vehicle Centre in Penrith, giving its light duty trucks and light commercial vehicles a dedicated showroom and aftersales destination. The existing Inchcape FOTON Penrith dealership has been refurbished to reflect the brand’s latest global identity. Inchcape says the site will set the standard for future FOTON dealerships
