A leading national road transport organisation is calling on the federal government to commit $3.5 billion to kick-start truck decarbonisation.
In a freight transport decarbonisation industry white paper issued today, the National Road Transport Association (NatRoad) says a Clean Transport Fund would go a long way to helping the industry play its part to help Australia achieve net zero emissions by 2050.
In 2020, transport produced 18 per cent of Australia’s greenhouse gas emissions, of which trucks and buses accounted for a fifth.
The white paper, which draws on local and global research, advocates for a mix of financing and direct incentives to drive the move towards alternative fuels like electricity, hydrogen, and low emission trucks.
NatRoad CEO Warren Clark said the proposed fund would involve an additional $3 billion across the budget forward estimates, split between $2 billion for low emissions freight financing based on the existing Clean Energy Finance Corporation (CEFC) financing model and a further $1 billion in incentives.
The existing $500 million Driving the Nation Fund, which is focused on light vehicles and a small number of demonstration projects for heavy vehicles, would continue as part of the broader Clean Transport Fund.
“We are advocating for a hand-up, not a hand-out. This is a shared national problem, and it requires a shared national response,” Clark said.
“It is a must to have co-investment by government as many of our road freight businesses are unable to meet the steep initial costs. The vast majority are small businesses with chronically low profit margins.”
The CEFC is the federal government’s ‘green bank’ which has invested $12.7 billion to enable total transactions worth $48.8 billion focused on supporting economy-wide decarbonisation including renewable energy, energy efficiency, alternative fuels and low carbon materials.
NatRoad will work towards establishing a forum of trucking industry and government stakeholders early in 2024 to discuss the white paper and build collaboration for decarbonisation.
Earlier this week, the International Road Transport Union, the world transport organisation, representing over 3.5 million transport and logistic companies in more than 100 countries, announced NatRoad as its Australian member representing road freight members.
Clark said the $2 billion establishment cost of the Clean Transport Fund low emissions freight financing would be about half of the projected public benefits from reducing carbon emissions from road freight.
“This may not be sufficient in the long term, but represents a reasonable, proportionate initial investment to drive down emissions and accelerate the market take up of low emissions solutions,” Clark said.
The Grattan Institute has calculated the public benefits from accelerating the uptake of zero emission trucks to be approximately $4.2 billion, including avoided health costs, avoided CO2 emissions and reduced noise.
Grattan says these benefits will require $9.6 billion to be spent by businesses, including infrastructure and vehicle costs, reduced payload, and a need for more vehicles.