A new report from the Australian Academy of Technological Science and Engineering (ATSE) has emphasised the urgent need for Australia to reduce reliance on diesel in mining, road freight, agriculture, fisheries and forestry.
The report, released in partnership with metal mining giant, Fortescue, gives five recommendations for the Federal Government to reduce its diesel reliance, including the commission of an independent review to reform financial incentives that support diesel use.
ATSE CEO, Dr Kylie Walker, explained that Australia needed to take a new approach to fuelling heavy industry in order to achieve its low-emission targets — an approach which could involve policy reform, tax levers and new technological solutions.
“There is an urgent need to decarbonise Australia’s most emissions-intensive sectors,” she said.
“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.”
The ATSE’s proposed independent review and its reforms would include changes to the Fuel Tax Credits Scheme (FTCS), which acts as a 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.
Additionally, the ATSE 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.
Other suggestions made by the report to combat diesel reliance include the establishment of a coordinated Future Diesel Strategy, investment in comprehensive infrastructure to support the clean energy transition and targeted research and development.
ATSE Fellow, Fortescue Board Member and former CSIRO Chief Executive, Dr Larry Marshall, emphasised 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 said.
“Right now, the Fuel Tax Credit Scheme effectively subsidies 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.”
Marshall added that the transition away from diesel is imperative to the country’s future production power.
“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,” he said.
“Emerging clean technologies needs the right mix of policy, incentives and investment to make Australia’s green and gold vision a reality.”
