Australia should aim to replace five per cent of its liquid fuel supply with low carbon fuel by 2035, Australian Trucking Association CEO Mathew Munro said today.
Mr Munro was responding to the Government's consultation paper on securing Australia's cleaner fuels industry.
"Australia is one of the world's great energy exporters - we're the third largest exporter of LNG behind Qatar and the United States - but we are heavily reliant on imports of crude oil and refined petroleum products," Mr Munro said.
"Our submission aims to balance the objectives of affordability, resilience, reducing carbon emissions, usability in today's truck engines and the opportunity to create new industries.
"To do this, we consider that the Government should aim to replace no more than 5 per cent of Australia's liquid fuel supply with low carbon fuel by 2035.
"The targets in the consultation paper, which could be as high as 20 per cent, are far too ambitious. They would dramatically increase the price of fuel and would require large imports of refined low carbon fuel or feedstock."
The submission warns against including biodiesel in the low carbon mechanism.
"The truck OEM members of the ATA's Industry Technical Council have warned that modern truck engines are typically designed to use fuel that meets the diesel fuel quality standard," Mr Munro said.
"The standard restricts biodiesel to no more than 5 per cent. Using blends greater than 5 per cent would adversely affect the durability of both engines and fuel systems, and likely void engine warranties.
"Encouraging the production of biodiesel would also risk the investments becoming stranded as more advanced biofuels become available.
"In contrast, renewable diesel is made using a different process to biodiesel and is a drop in replacement for conventional diesel," he said.
Mr Munro said that fuel suppliers should be able to access non-fuel credits for measures such as rolling out electric vehicle charging.
"Non-fuel credits are a common feature of similar schemes, such as the California Air Resources Board standard and the Canadian Clean Fuel Regulations," Mr Munro said.
"Including measures like electrification in the scheme would reduce the per tonne cost of lowering carbon emissions, because it is cheaper to electrify than use renewable diesel in applications where electric vehicles are technically and operationally suitable," he said.
The ATA has also released its submission in response to the Government's consultation paper on its fuel security and resilience package.
"While the ATA supports the measures in the package, they must not be considered an end point. Australia must work toward meeting our IEA obligation to hold an emergency fuel reserve equivalent to 90 days of net fuel imports," Mr Munro said.
"The land and construction capacity constraints at major storage sites should be addressed with a complementary focus on supporting smaller storage locations across the fuel supply chain in regional Australia, including storage at road transport businesses.
"The Livestock, Bulk and Rural Carriers Association, an ATA member, has made a separate submission that goes into detail about how regional storage could be planned, managed and funded," he said.
Fuel security and resilience package submission
