Executive Summary
- NatRoad urges the government to establish a $3 billion Clean Transport Fund to support the trucking industry’s transition to net zero emissions.
- The Clean Transport Fund aims to support electric truck rollout, hydrogen solutions, and supply chain emission reduction obligations for big businesses.
- The Fund is part of our new policy paper “Stronger Economy, Lower Emissions” which calls for a Low Carbon Fuel Standard (LCFS) and highlights the critical need for financial backing and regulatory reform.
The Clean Transport Fund need
The trucking industry is at a pivotal juncture, facing commercial pressures that call for urgent action to ensure its sustainability and profitability. At NatRoad, we have identified a critical need for a $3 billion federal Clean Transport Fund to support the sector’s transition to lower emissions. This fund is not just about emission reduction, it’s a commercial necessity that will help secure the future of small, medium, and large businesses within the trucking industry.
Trucking is the backbone of Australia’s economy, responsible for moving goods efficiently across cities, towns and the country. Despite its vital role, the industry operates on razor-thin profit margins, averaging just 2%. Add the shortage of 26,000 drivers and an increasing burden of regulatory compliance, the sector is under growing pressure to remain viable. Our responses to the government’s review of the Transport and Infrastructure Net Zero Roadmap and Low Carbon Liquid Fuels, and our policy paper: ‘Stronger Economy, Lower Emissions’ have highlighted the need for financial support. Existing government plans fall short of providing the comprehensive backing required. This is where the $3 billion Clean Transport Fund becomes vital.
Small trucking businesses are the lifeblood of many regional and rural communities. They ensure essential goods reach even the most remote areas. These businesses often operate under tight budgets, making it challenging to invest in new technologies or comply with evolving regulations. The transition to lower emissions is a significant commercial challenge for these operators. Without substantial financial support, many small businesses may be unable to afford the necessary upgrades, risking their survival.
The Clean Transport Fund would provide the critical support needed to help small trucking businesses transition to lower emissions without hampering their operations. This includes facilitating the rollout of electric trucks, recharging infrastructure, and hydrogen solutions, where they make sense. Additionally, better heavy vehicle access and comprehensive information for making low-emission investment decisions would help these operators to remain competitive in a rapidly changing market.
For medium-sized trucking businesses, the commercial pressures are equally daunting. These businesses have larger fleets and often higher operating costs, making the transition to lower emissions complex and expensive. The Clean Transport Fund would help alleviate some of these financial pressures by providing funding for advanced technologies and infrastructure. This would not only reduce emissions but also improve operational efficiency and lower long-term costs.
Large trucking businesses, a linchpin of Australia’s supply chain, are also facing significant commercial pressures. These businesses are under increasing scrutiny from major transport customers and stakeholders to reduce their carbon footprint. However, the costs associated with transitioning to lower emissions can be prohibitive. The Clean Transport Fund would provide the necessary financial support to invest in cutting-edge technologies and infrastructure, ensuring that large businesses can meet their sustainability goals without compromising profitability, drivers or the supply chain.
The Clean Transport Fund would promote a fair and equitable transition for the entire trucking industry. It would help level the playing field by providing small and medium-sized businesses with the resources needed to compete with larger operators. This is crucial for maintaining a diverse and resilient supply chain, which is essential for Australia’s economic stability.
Big businesses must also play their part. Major transport customers cannot continue to seek low-cost transport contracts while claiming to be committed to sustainability. They must offer better rates and contract terms to enable road freight companies to invest in low-emission solutions. The Clean Transport Fund would support this by imposing a supply chain emissions reduction obligation on big businesses, ensuring they take responsibility for their scope 3 emissions.
Australia also needs to adopt a Low Carbon Fuel Standard (LCFS), which is essential for integrating renewable diesel and other low carbon fuels into trucking operations. An LCFS would gradually reduce the carbon intensity of fuels, allowing businesses to continue operating efficiently while meeting emissions targets. This is particularly important for long-haul and regional freight, which are difficult to electrify and remain heavily reliant on diesel.
Governments must do more to support the trucking industry. Successive governments have invested billions in aiding big energy businesses to decarbonise, yet small trucking businesses have missed out. The proposed $3 billion Clean Transport Fund would represent just 2.5% of the cost of the 10-year infrastructure pipeline, a reasonable request considering the significant public benefits, such as lower emissions and health costs.
The trucking industry is at a crossroads. Without serious investment and a comprehensive transition strategy, the sector risks being pushed into crisis. A Clean Transport Fund can stop that happening. It is time for the Federal Government and big businesses to step up and support the sector that keeps our economy moving.
Find out more
If you are interested in the work NatRoad is doing in the decarbonisation space, check out our submission on the subject or dive into our decarbonisation industry resources.
