Reducing CO2 emissions in the road transport sector

Overall, the new truck market in 2016 was up over 2015 and this was good news, however the growth came at the bottom end of the market with strong gains in light-duty truck sales as well as a slight rise in medium-duty truck deliveries, while heavy-duty truck sales continued to stagnate in 2016 as they have done for the past few years. Perhaps of greater concern for Australian governments and the broader community is the trend in sales of alternatively powered and fuelled heavy vehicles, those trucks and vans that use electric, hybrid and alternative fuels such as compressed natural gas (CNG).

These vehicles reduce both CO2 and noxious emissions in the road transport sector. In an age where our government has made international commitments to reduce our country’s carbon footprint in line with global emission targets, we should be fostering the use of such new ‘greener’ technologies. The numbers however, tell a very different story.

Globally in markets such as Europe, Japan and the USA, the uptake of alternatively powered and fuelled vehicles, cars and trucks, runs at approximately two to three per cent of new vehicle sales each year. There are some standout performers such as the Netherlands, where sales of new vehicles that substantially reduce CO2 emissions make up more than 30 per cent of all new vehicle sales per year. In Australia, sales of light passenger vehicles using these technologies is about one per cent per year, while in the heavy vehicle domain, TIC’s T-Mark new truck sales data shows that between 2011 and 2015, alternatively powered and fuelled trucks accounted for just 0.3 per cent of new truck sales per year, on average. This number plummeted to just 0.1 per cent of new truck sales in 2016 – fewer than 40 ultra low emission trucks were sold.

So why is it that Australia lags behind almost all other developed nations in the take-up of CO2-reducing vehicles? One of the simple truths is the complete absence of any form of Australian government incentives for the purchase of such cars and trucks. Governments in other parts of the world offer incentives for the purchase of low-emission vehicles, these range from cash rebates on the initial purchase price, cheaper – or no – annual vehicle registration fees, accelerated depreciation and reduced company tax rates. The Netherlands’ stellar uptake of such vehicles was fuelled, pun intended, by a 50 per cent purchase rebate.

Another typical ‘show stopper’ with these new technologies is that they generally require new infrastructure, particularly for refuelling. It is the age-old conundrum, ‘the chicken or the egg’. These new vehicles require new and specialist infrastructure, however the demand, the number of vehicles operating, is not there initially to economically justify the infrastructure spend, and without the infrastructure the vehicles cannot run!

In late 2016, the US Department of Transport (DoT) announced plans to roll out a national network of Alternative Fuel Corridors (AFCs). The DoT’s AFC plan will eventually see 85,000 miles (136,700km) of roads, on 55 major transport routes, across 35 states covered by refuelling and recharging facilities to support electric, hydrogen, propane (LPG) and natural gas vehicles. The process will start with new and dedicated road signs that will alert drivers to where they can find fuel for their alternatively fuelled vehicles. Moving forward the DoT will be working with states and stakeholders to develop its vision of an alternative fuel network that will, according to Gregory Nadeau, Federal Highway Administrator, DoT, “enable coast-to-coast travel using alternative fuels.”

If our government is serious about the wider uptake of alternatively powered and fuelled trucks in Australia, reducing CO2 emissions from the road freight transport sector and meeting its international commitments to reduce our country’s carbon footprint, it must seriously consider financial incentives for the purchase of new vehicles that are fitted with the appropriate emission-reducing technologies. Australian governments, both at state and federal level, must also commit to infrastructure spending for alternative refuelling facilities, with the US’s DoT a perfect example of the leadership that is required by governments in this domain.

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