You really have to question whether government and other stakeholders are putting the ‘cart before the horse’ by making decisions to discourage investment in conventional fossil fuel industries well before the demand for these products actually starts to decline.

The recent experience of the Australian electricity industry is a case in point. The long lamented absence of a coordinated transition plan for the national electricity industry meant that decisions to exit coal generated electricity were made by individual businesses. The result was that supply (and investment) of coal-fired electricity generation has declined at a faster rate than could be replaced by continuous renewable energy generation.

The result was an unprecedented 20-fold increase in wholesale electricity prices in Australia in early June 2022 – and prices remain 10 time higher than the long term average today. This increase caused the Australian Energy Market Operator (AEMO) to suspend market operation for the first time in its existence and electricity consumers in Eastern Australia were asked to reduce electricity use at the same time.

Put simply, everyone understands the need to reduce emissions as all economies move to Net Zero. This aspiration is rightly supported by most, but that support is premised on an orderly transition from current fossil fuel energy sources to cleaner energy sources – whether that be electricity generation or transport fuels.

“The time for talking about the merits of Net Zero is over. We must now turn out attention to how we are going to get there without dramatically increasing transport energy costs for all”, said ACAPMA CEO Mark McKenzie

“Failure to ensure that the global growth in cleaner energy vehicles (i.e. EVs and Hydrogen) keeps pace with the rate of global decline in conventional transport fuels, will cause an inevitable squeeze in conventional fuel supply that will likely make the high global fuel prices of the past six months look like ‘minor and short lived’ by comparison”, said Mark.

Indeed, there are some oil market analysts in our industry that have suggested that the threefold increase in the refining premium for finished fuel products – especially diesel – experienced in recent months, provides early evidence that the global refining capacity is already declining at a significantly faster rate than the rate of demand destruction caused by electric vehicles.

There has been a recent development in Australia that suggests investment in existing fossil fuel assets may already be happening in our own country. Several fuel retailer businesses have recently reported considerable difficulty in securing asset finance for the replacement of pumps and forecourt infrastructure damaged during the recent flood events in Eastern Australia.

One of these retailers advised that all four of the ‘Big Banks’ advised that they were no longer providing asset financing products for fuel assets given ‘a change in corporate financing policy’. The retailer took that to mean avoiding support of investment in the fossil fuel industry.

“The business was, however, offered alternative and higher cost finance products that were not asset specific – an offer that he politely declined”, said Mark

“If this is truly the case – and we are seeking to verify same with the Australian Banking Sector now – then this is a very worrying sign for the future of fuel supply and fuel prices in Australia”, added Mark.

That said, where one door closes another opens. ACAPMA has recently been liaising with the Australian Asset Finance Broking Industry to understand what alternatives might be available to a fuel business that are refused asset financing for fuel infrastructure in the future.

“There are numerous second tier financiers that are available to provide competitively priced asset financing products for Australian fuel businesses”, said David Gandolfo (former President of the Commercial Asset Finance Brokers Association and Director of the Council of Small Business Organisations of Australia).

David Gandolfo understands the Australian fuel industry having worked closely with ACAPMA over the past five years on a range of asset financing issues. David also presented at the 2018 Asia Pacific Fuel Industry Forum (Auckland) and has a first-hand knowledge of the challenges that fuel business face in securing finance for forecourt infrastructure and store fit outs alike.

ACAPMA therefore encourages Australian fuel businesses encountering difficulty in securing asset finance to reach out to David (or the asset finance broking industry in general) to discuss what options might be available to them. David can be contacted directly via

“In the meantime, ACAPMA will seek clarity from the Big Four banks about the apparent change in policy for asset financing of fuel assets”, said Mark

“We will also be working with the new Albanese Government and other fuel industry stakeholders to develop a meaningful transition plan for the Australian fuels sector over the next 20 to 30 years – one that supports the achievement of Net Zero Transport emissions with minimal cost and supply risk to the Australian fuel industry, Australian business and industry in general, and the wider Australian community”, concluded Mark.