From the CEO: Crystal ball shows the need for EV policy signposts

The reality is that for heavy vehicles, we’re at the very start of a long and complex decarbonisation road in Australia.

Read time: 4 mins

By Warren Clark

Originally Published in Owner Driver May 2023 Issue

What’s the difference between a futurist and a bookmaker? When you deal with a bookie, you have a reasonable chance of getting your money back.

Not familiar with the “futurist” term? The dictionary defines it as a person who studies the future and make predictions about it based on current trends.

I’m certainly not disparaging futurists. There’s no harm in crystal ball gazing when it’s informed by facts, and there’s something to be said for thinking that keeps us ahead of the game.

Balancing that is the fact that most heavy vehicle operators are more focussed on next month’s payroll, filing their BAS and how they can drive down their fuel costs.

Futurists are predicting a number of trends that will shape the way transport operates. Some of the big ones are the take-up in electric vehicles and digital technology, and the increasing use of drones in last-mile freight delivery. 

I thought it was interesting to look at some of these global predictions and assess where Australia is.

Specifically, let’s look at the take-up of low emissions trucks.

I had the benefit of research by HoustonKemp Economists, commissioned by NatRoad with the support of our major partner Ampol, that examined local trends and their possible impact on the viability of local operators.

We know that the transport sector accounts for around 18.6 per cent of Australia’s greenhouse gas emissions. Greenhouse gas emissions have increased by approximately 11 per cent since 2005, although a one percent decrease occurred in the 2022 financial year due to widespread COVID lockdowns.

We also know that road transport (passenger and freight) accounts for around 85 percent of transport greenhouse gas emissions, with trucks, buses and light commercial vehicles accounting for slightly under half of road transport emissions.

Australia has committed to a 43 percent decrease in total emissions by 2030 and net zero by 2050. The Albanese Government has set out its Long-Term Emissions Reduction Plan and road transport is expected to play a significant role.

When it comes to heavy vehicles and related technology, Australia takes its lead from Europe, Japan and the USA, importing both from overseas.

We are a very small market in comparison with the rest of the world. Supply and demand mean these trends take some time to become a local reality.

Several large European truck manufacturers have agreed that by 2040 all new trucks sold must be fossil-free to reach carbon neutrality by 2050, and are actively working with governments to ensure the right policy and enablers (like charging stations) are in place.

The zero emission vehicle options commonly considered are Battery Electric Vehicles (BEV), Electric Road System Vehicles (ERSV) which draw electricity from cables installed over a road while driving; and hydrogen Fuel Cell Electric Vehicles (FCEV).

Development of alternate fuel trucks is proceeding at pace overseas, driven by policymakers in markets like the US. Here in Australia, however, the take-up of EVs is very much at the utility truck and light rigid end of the market, with a focus on hybrids.

Each have their limitations, especially for long-haul freight. A barrier is the size of batteries and the trade-off in reduced payload.

The reality is that for heavy vehicles, we’re at the very start of a long and complex decarbonisation road in Australia.

At the time of writing, the Federal Government was still considering the introduction of a national fuel emissions standard. There was no sign of tax incentives to facilitate the take-up of EVs.

We will need a network of truck-friendly charging stations and, of course, the Australian second-hand electric truck market is non-existent.

NatRoad’s commissioned research shows that of almost 200 operators spoken to, very few (eight percent) say that reducing their carbon footprint is ‘very important’ to their business.

The large majority of operators engaged do not actively measure their emissions. Only 28 percent of businesses stated that they have a plan to reduce their carbon emissions.

The Australian operators that do have a plan to reduce carbon emissions, are focussing on doing so by reducing fuel use through more efficient vehicles or through driver training. Only a handful identified low/zero emissions vehicles (hydrogen/electric) as viable elements of their carbon reduction plan.

Asked about their views of the future role of various fuel sources, most respondents (85 percent) considered traditional diesel to have an ongoing role in the industry. Few thought hydrogen fuel cell vehicles (19 per cent) or electric vehicles (11 per cent) represent a suitable ongoing fuel source.

This was not a representative study of our industry but a pretty good snapshot of what operators are thinking right now at the smaller end of the business scale. More than half of the respondents employ fewer than 10 drivers and earn revenue of less than $2 million per annum.

None of this suggests operators are not well intentioned. The research just shows that there’s a long way to go before decarbonisation becomes an essential element in the viability of their businesses.