As the Federal Government’s Climate Change Authority prepares to release its second annual report on Australia’s progress towards achievement of its 2030 greenhouse gas emission targets, it is clear that the market adoption of electric vehicles in Australia is well behind the Australian Government’s targets.
Recent analysis by the Australian Department of Infrastructure Transport and Regional Development (DITRD) forecasts that battery electric vehicles will likely make up just 27% of new car sales in 2030. This figure is well below the 89% target used to underpin the Federal Government’s Electric Vehicles Strategy .
The DITRD also estimates electric vehicles will account for just 5% of Australia’s small vehicle fleet by 2030. This is just a third of Labor’s pre-election modelling of 15% of the whole small vehicle fleet by 2030.
Meanwhile, analysis of new car sales reveals that while sales of some EV models entered the top 20 new cars sold in Australia in 2023, largely as a result of strong sales in the first half of 2023, sales growth is slowing. Further, the top 5 light vehicle sales in Australia in 2023 continue to be dominated by large diesel-powered utilities such as the Toyota Hilux (#1), the Ford Ranger (#2) and the Mitsubishi Triton (#4). The other two vehicles making up top 5 model sales in 2023 to date are two petrol-powered small SUVs – the Toyota Rav4 (#3) and the Mazda CX5 (#5).
Australian governments policies supporting EVs also appears to be waning, with both the Victorian Government and the New South Wales Government announcing that they are terminating incentive programs designed to incentivise for the purchase of EVs from 1 January 2024. Similar decisions made in Europe and the UK in 2021 and 2022 saw total annual EV sales growth stall.
“Put simply, governments both here and overseas, are becoming increasingly worried that public policies and financial incentives have failed to catalyse the high rate of EV sales growth needed to deliver Net Zero emissions by 2050”, said ACAPMA CEO Mark McKenzie.
“In addition, here in Australia, the challenges of EV charging and range limitation that have been aired in social media posts over the past 12 months appear to have hardened market resistance to EVs – at least for now”, Mark added.
So what next? Well, some suggest that the solution is to fast- track Hydrogen Fuel Cell Electric Vehicles (FCEVs).
While that might be an answer, the substantially higher cost of these vehicles (compared with EVs) and the difficulty of providing cost-economic hydrogen refuelling infrastructure means that significant cost breakthroughs are required before this technology can be viable at market scale.
“While FCEVs are likely to be part of the technology mix needed to support Net Zero emissions by 2050, no-one (not government, industry or consumers) believe that Hydrogen is a mainstream solution within the next 5 to 10 years”, said Mark.
So where does that leave us when it comes to reducing GHG emission from transport?
A decision by the European Parliament earlier this year suggests that there is another potential solution that could be advanced alongside BEVs and FCEVs. The decision, made by the European Parliament on 31 March 2023, exempts internal combustion vehicles from a legislated ban on their sale by 2035 provided these vehicles are operated on low carbon fuels such as e-fuels, renewable fuels, and advanced biofuels.
The advantages of using e-fuels (low carbon liquid fuels) are obvious given that these e-fuels can simply be substituted for traditional petrol and diesel fuels with no hardware change. It means that motorists can drive the technology that they already know and trust – no having to worry about worrying about running out of charge and then trying to find an EV charger.
In addition, there is no need for all consumers to purchase an expensive new technology vehicle. This means that, using e-fuels, lower-wealth households can readily access a low carbon mobility solution without the inherent social inequity that arises from only making low carbon mobility available to the high-wealth households that can afford to purchase a higher cost BEV or FCEV.
“E-fuels also present an opportunity to reduce the economy-wide adjustment costs of transitioning to low carbon mobility. That is, industry does not need to invest in new distribution and retail infrastructure – the existing infrastructure can be used – and consumers don’t need to junk perfectly good cars and trucks to purchase higher priced new technology vehicles to do their bit to achieve Net Zero”, said Mark.
“In a world of increasing geopolitical uncertainty, e-fuels provide a strategy for individual economies to improve their national fuel security given that these fuels can be manufactured in-country without the need to source oil (or other feedstocks) from a small number of overseas,” Mark added.
So what is an e-fuel and how is it produced? For that answer, we turned to the European E-fuel Alliance’s website (www.efuel-alliance.eu).
“EFuel production is based on the extraction of hydrogen. This happens by means of an electrolysis process that breaks down water (e.g. seawater from desalination plants) into its components of hydrogen and oxygen. For this process and further production steps, electricity is required.
In a second process step, with the aid of e.g. Fischer-Tropsch synthesis, the hydrogen is combined with CO2 extracted from the air and converted into a liquid energy carrier: eFuel. Under high pressure using a catalyst, the hydrogen binds with the CO2. Because electricity is used for the production of eFuels, the procedure is known as a power-to-liquid process: electricity is converted into a synthetic liquid that is easy to store and simple to transport.
After processing in refineries, this eFuel can be used as eGasoline, eDiesel, eHeating oil, eKerosene and eGas and can completely replace conventional fuels. Moreover, due to their drop-in capability, eFuels can be blended with conventional fuels in any ratio. Existing logistics, distribution and refuelling infrastructures, such as tank farms, tank lorries, pipelines and filling stations, can continue to be used.
The climate neutrality of eFuels derives from the fact that electricity from renewable energies is used in their production and only as much CO2 is emitted during use as was previously bound during production. eFuels can therefore make a climate-neutral contribution in all sectors where conventional fuels are currently used (e.g. transport or heating in buildings)”.
“But there are other processes that can be used to produce e-fuels, low carbon synthetic fuels, and Australia is one of numerous countries that are seeking to develop these fuels”, said Mark.
Earlier this year, Viva Energy announced plans to build coprocessing infrastructure at its’ Geelong refinery to receive and process feedstocks such as used cooking oil, animal fats and synthetic crude made from waste plastics – which would otherwise find their way into landfill. These feedstocks will be blended with crude oil to reduce the energy intensity of the conventional fuels that are produced at Geelong Refinery and to recycle waste plastics through the polypropylene plant acquired by the company last year.
So, if it is possible to produce a low carbon (or even zero carbon) e-fuel that can be readily used in the existing car and truck fleet – and fuelled using existing the Nation’s existing distribution and service station infrastructure – why are we not doing that right now?
The simple answer is that the early ‘trial’ experience of producing these fuels is that they are expensive to produce. Industry and governments need to better understand the drivers of these high production costs, and the degree to which these costs could be lowered with the realisation of full- scale production – and that will take time.
For advanced biofuels (and synthetic fuels using waste feedstocks), a further consideration is whether it is feasible – both logistically and economically – to aggregate the large volume of waste feedstocks needed to support continuous refinery-scale production.
“Nonetheless, these economic issues are no different to the economic challenges we face with the widespread adoption of BEVs and FCEV’s and therefore are not a reason to rule out e-fuels at this stage,” said Mark.
“It is time for all Australian governments to work with industry and stakeholders to explore the policy and investment incentives needed to add e-fuels (and advanced biofuels) to Australia’s plan for reducing GHG emissions from the national car and truck fleet as a new path to Net Zero by 2050 is charted”, concluded Mark.