Australia is urging the world to electrify, but its own freight system remains overwhelmingly dependent on imported diesel when electric trucks could cut emissions, strengthen fuel security and lower costs.
Chris Bowen is right to preach electrification to the world. In Bonn this week, as COP31’s president of negotiations, he threw Australia’s weight behind the summit’s flagship target: lifting electricity from just over 20 per cent of global final energy demand to 35 per cent by 2035. “Electrification reduces the need for fossil fuels,” the energy minister said. “I see them as different sides of the same coin.”
But congregations notice what the preacher practises, and what is idling in Australia’s own truck yard is hard to miss. In the May Budget, the government found $14.8 billion to secure, store and subsidise liquid fuel and just $40.5 million to electrify Australia Post’s fleet.
Fewer than 400 electric trucks were sold here last year, just 0.7 per cent of the market. In China, one in five new trucks is electric.
Germany is at seven per cent. Britain manages three times our rate. For a minister about to spend five months persuading Canada, the United Kingdom and South Korea to join an electrification coalition, Australia’s lagging policy framework is an unnecessary credibility headwind.
The Budget’s own fuel-resilience chapter acknowledges that electric vehicle support, charging infrastructure and heavy vehicle reform are “investments in our long-term fuel resilience”. What it doesn’t say is that it’s very likely the cheapest path to adding days to our strategic reserves. Instead of buying, storing, and subsidising fuel, electrification offers a path to needing less of it – leaving more for those who have no alternatives.
Start with the numbers Bowen’s own agencies produce. The Department of Climate Change, Energy, the Environment and Water estimates that we will miss the 61-70 per cent abatement target set by the Climate Change Authority. The latest official projections show emissions over 2031–35 are 283–429 Mt CO₂-e above the carbon budget for that period. Transport is the sector driving this gap, with rising emissions and on track to be the largest emitting sector by 2030. The heavy trucks that act as the backbone of Australia’s freight network are the largest diesel guzzlers – running almost entirely on imported diesel to keep the country moving. These also happen to be overwhelmingly small logistics businesses most vulnerable to fuel price spikes; 90 per cent of all road freight businesses turn over less than $500,000 a year.
Analysis by Mandala Partners and Energy Futures Foundation shows that more than a third of Australia’s trucks are over fifteen years old. By 2030, 43 per cent of the current fleet will be at or over their typical replacement age. Every retiring truck replaced with diesel locks in another decade of oil dependence. Replace the retiring rigid fleet with electric instead, and Australia avoids 73 million tonnes of emissions over fifteen years, equivalent to 16 per cent of a full year’s national total.
What makes freight unusual is that the commercial case arrived before the policy did. Battery-electric trucks already beat diesel on total cost of ownership for rigid trucks, and will reach parity across all classes by 2030. Three-quarters of today’s freight trips could be done with the current generation of electric truck models on distance and payload alone. Modelling shows that the benefits are significant:$138 billion in cumulative GDP, 900,000 additional jobs by 2050, and significant gains to productivity and price stability by reducing our reliance on volatile fuel prices.
So why is Australia barely in the race? Because of outdated regulations that were designed with combustion engines in mind. Weight limits effectively tax battery mass. Trailer dimension rules block vehicles sold as standard in Europe and the United States, which is one reason manufacturers offer Australia far fewer electric models. When the executives who move freight for Woolworths, IKEA and Linfox were asked at this year’s national Freight Forward summit what they needed their top priority was the same: regulatory fixes that would cost the budget next to nothing.
Bowen told delegates in Bonn “it falls to us to do more”. Here is what more could look like.
Australia could arrive in Antalya in November with a commitment of 50,000 electric trucks by 2030, run on Australian energy, and displacing a billion litres of diesel annually; freeing fuel for the farmers and operators who cannot yet switch.
Canberra and the states could pass regulatory reform this year that will set a path to an additional one million electric trucks on our road before 2050. The government’s National Competition Policy provides a policy framework, and the ongoing uncertainty in Hormuz creates the impetus. For the same price tag of about $3 billion to buy a one-off supply of 10 days of fuel reserve, we can achieve true structural reform that gives Australia lasting energy security.
A reform package like this would give our chief negotiator the one thing no communiqué can: the standing of a country that takes its own advice.
Bruce Hardy
Bruce Hardy is Executive Director of Energy Futures Foundation and formerly General Manager – Emerging Business for AGL
Adam Triggs
Adam Triggs is a senior research manager at the e61 Institute, a non-resident fellow at the Brookings Institution and a visiting fellow at the Crawford School at the Australian National University