In a new report, ATSE says more needs to be done to decarbonise industries that rely heavily on diesel
The Australian Academy of Technological Sciences & Engineering (ATSE), in collaboration with Fortescue, has released a report on how to decarbonise diesel-based industries such as mining, road freight, agriculture, fisheries and forestry.
With diesel fuel the dominant energy source for machinery, trucks and equipment, it contributes 17 per cent of Australia’s total carbon emissions. Australia also imports nearly 29 billion litres of diesel annually, reflecting a heavy dependence on international fuel markets and diminishing domestic refining capacity.
With Australia aiming for a 43 per cent reduction in emissions by 2030 and net zero emissions by 2050, ATSE says the time is now to implement widespread alternatives to the use of diesel in those industries that rely on it most heavily.
“There is an urgent need to decarbonise Australia’s most emissions-intensive sectors,” ATSE CEO Dr Kylie Walker says.
“By encouraging the application of mature clean fuel technologies, investing in fast-tracking clean tech in development, reducing the cost of green alternatives and increasing the cost of diesel in a targeted and balanced way, Australia can achieve its industrial decarbonisation.
“Early stage research and development initiatives are also crucial in supporting the transition away from diesel.”
The report calls for an independent review which should consider a range of reforms, including to the Fuel Tax Credits Scheme (FTCS), which ATSE says is a major barrier to the transition away from diesel.
By subsidising diesel use, the FTCS currently protects high-emitting sectors from the true cost of fossil fuel consumption and undermines national emissions reduction goals.
The report also recommends examining changes to the Australian market-based emissions reduction mechanism by exploring the introduction of carbon pricing or an adjustment of the Safeguard Mechanism to better reflect the environmental impact of diesel.
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ATSE’s report highlights a range of mature and emerging technologies, and the need for a comprehensive techno-economic assessment of decarbonisation pathways beyond electrification – as well as mechanisms to bring clean fuel tech to market.
Other recommendations include the establishment of a coordinated Future Diesel Strategy, investment in comprehensive infrastructure to support the clean energy transition and targeted R&D investment.
ATSE Fellow, Fortescue Board Member and former CSIRO chief executive Dr Larry Marshall emphasises the importance of industry partnering with government to shape science-based industry and energy policy.
“Heavy industry wants to transition to cleaner fuels, but the current policy settings make it harder than it should be,” he says.
“Right now, the Fuel Tax Credit scheme effectively subsidises burning diesel, while companies that invest in clean alternatives face higher costs especially in this transition period. That imbalance holds back innovation and locks in emissions.
“The federal government has a critical role to play in fixing those settings and creating incentives that accelerate the adoption of clean technologies. At the same time, industry must step up and co-invest in the solutions that will cut emissions and deliver new green industries for Australia.
“If we want Australia to become a clean energy superpower, if we want a future made in Australia, then we need a system that rewards smarter, cleaner choices. Emerging clean technologies need the right mix of policy, incentives and investment to make Australia’s green and gold vision a reality.”
Walker says a strategic mix of policies, investment and industry engagement is necessary to support this transition.
“The transition away from diesel while supporting thriving Australian freight, mining, agricultural, fisheries and forestry sectors is a complex challenge. It won’t be easy and there is no one-size-fits-all solution – it will need to be all-encompassing,” she says.
“But we have the technology – we can do it if we get the settings right.”
To read the report, visit: www.atse.org.au/what-we-do/strategic-advice/decarbonising-diesel-industries/