Industry News

Possible Positive Scenario for Trucking

It is rare for road transport to come away from a Federal Budget announcement and get the feeling it includes good news, but this year’s event seems to include a possible positive scenario for trucking as a whole.

Alongside all of the usual stuff about the cost of living, there was some information about a development which could be a bit of a boost for the trucking industry going forward. It comes in the form of one part of the Future Made in Australia (FMIA) policy, which has gone under the radar for many who are just thinking about a discount on their electricity bill. The FMIA does contain some interesting and possibly beneficial future options for the trucking industry. 

At the moment, the trucking world is trying to digest the ramifications of transitioning over to a much lower carbon business model, at the same time as being bombarded with contradictory statements from various interest groups pushing their own particular barrow, whether it be electric, hydrogen, HVO or whatever else..

We need to accept that the transition is inevitable and act accordingly, but so far the options on offer have not set the world on fire and do not look likely to scale up any time soon. We are looking for some certainty and need any electric charging system, hydrogen or HVO fuelling system to be widespread enough to make it a practical option for a fleet.

Some of the funding from the FMIA has been earmarked to stimulate the growth of, what the Treasury calls Low Carbon Liquid Fuels (LCLF) which could be a short term stop-gap solution and a longer term one as well. There is also funding available to develop green hydrogen, as well.

The budget papers include this quote, ‘Renewable diesel is estimated to be more than twice as expensive as conventional diesel, though this estimate depends heavily on market movements and international supply. Technology costs for fuels with higher abatement are expected to

decrease over time as production processes and scale improve. Early investments in this area can lay the foundations for a future LCLF industry.’

Hydrogen also gets a boost, ‘Key trading partners …. see hydrogen as a critical part of their transition to net zero, making exports of Australian renewable hydrogen an important opportunity for facilitating global decarbonisation. The costs of transporting, converting and storing hydrogen and its derivatives are currently high relative to unabated fossil fuels. However, this is exacerbated by distance, which means that Australia may be a competitive source of supply for key trading partners such as Japan in the future’.

The projects and aspirations of companies working in this area have, so far, seemed speculative, but the introduction of a system which sees the government underwriting projects may provide the certainty that both suppliers and potential customers are looking for to take this forward, increase production and consumption, bringing the pricing down.

There has been plenty of talk about this topic and a lot of opinions expressed it’s about time the government put some money where their mouth is and made something concrete a possibility.


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