Soon after coming to power in May 2022, the Albanese Federal Government began work on new national GHG emission reduction targets under the umbrella of the United Nation’s ‘Paris Agreement’ on Global GHG emissions.
Executed in Paris in December 2015 – and hence known as the ‘Paris Agreement’ – this binding agreement, legally committed all 196 participating countries, at the time, to the achievement of two GHG emissions targets, namely:
- A minimum 43% reduction in GHG emissions, relative to 2005 levels, by 2030, and
- Net Zero Emissions by 2050, where ‘Net Zero’ means the elimination of GHG emissions via new technology adoption and energy switching to the fullest extent possible – and then offsetting any residual emissions by implementing additional carbon initiatives that remove carbon from the atmosphere in the second instance.
In August 2022, the Albanese Government introduced two pieces of legislation designed to bring Australia’s legislated emission targets into line with the goals of the Paris Agreement – namely: the Climate Change Act 2022; and the Climate Change (Consequential Amendments) Act 2022. These two pieces of legislation were subsequently passed by the Australian Parliament and became law on 13 September 2022.
One of the central criticisms levelled at this new legislation has been the fact that the legislation amounted to Australia simply ‘signing on’ to global GHG emission targets – without first determining whether these targets were economically and technically achievable in Australia within the legislated timeframes.
While the Australian Government has rightly argued that our country had no choice but to bring its’ national GHG emission targets ‘into line’ with an international agreement struck 7 years earlier, the approach nonetheless raises serious questions about whether the target is achievable in practice. And if so, at what cost to the Australian economy and the wider community.
There are also additional questions to be answered in respect to the achievement of the interim 2030 target. Is the government proposing that GHG emissions will be reduced by 43% across all industry sectors? Or does the government envisage that the achievement of this interim goal will be achieved via greater emission reductions in some sectors (e.g. electricity generation) and lesser reductions in others (e.g. Transport).
Despite more than 18 months having passed since the passing of the Climate Change Act (2022) by the Australian Parliament, the real-world pathway towards the achievement of Australia’s Net Zero 2050 emissions target is no clearer. And the above questions about sectoral contributions to the near term 2030 target remain unanswered.
In fact, the timely delivery of key emission reduction projects (e.g. high voltage transmission lines connecting wind and solar farms to capital cities and proposed offshore wind farms) is being put at risk by a growing level of community antagonism to major carbon reduction projects based on local community perceptions of adverse social and economic impacts.
“For its part, ACAPMA recognises that the Australian fuel industry must play its’ part in supporting the practical achievement of Australia’s legislated emission reduction goals”, said ACAPMA CEO Mark McKenzie
“The achievement of these goals, however, must be guided by a National Transition Plan – one that is informed by comprehensive economic and engineering principles to advance emission reduction actions that are; (a) economically affordable, (b) socially acceptable, and (c) technically achievable within the proposed timelines”, said Mark.
Trying to advance emissions reduction without first developing a credible and comprehensive transition plan is foolhardy and disingenuous to Australia’s emission reduction aspirations. It risks unnecessary destruction of economic capital and jobs, unwarranted social disruption to local communities, and the non-achievement of Australia’s emission reduction targets.
Within this context, ACAPMA welcomes the Australian Government’s commitment to the development of six (6) Sectoral Decarbonisation Plans (SDPs) during 2024. It is understood that these plans will be used to provide a ‘blueprint’ for the advancement of industry-specific GHG emission reduction actions in the future and the measurement of progress in respect of same.
ACAPMA further understands that these ‘Sectoral Plans’ will be developed for the following industry sectors:
- Electricity and Energy
- The Built Environment
- Agriculture and Land
- Transport (Road, rail, air, and shipping).
The last of these sectors – particularly the sub-element relating to the road transport sector – is largely recognised as being one of the ‘hard to abate’ sectors, given that transport is intricately linked to national economic input costs and important social equity objectives (i.e. affordable private transport provides essential access to employment, education and recreational services for all Australian Households).
Accordingly, it is vital that all stakeholders in the sector are positively engaged by the Australian Government in the development of a realistic abatement plan for the Australian Transport Sector – one that delivers timely GHG emissions reduction in a manner that is economically affordable, technically achievable, and socially just.
The process used for the development of these Sectoral Decarbonisation Plans must set aside flawed ideological positions – for example, that internal combustions engines are ‘bad’ and electric motors are ‘good’. It must avoid picking ‘technology winners’ and focus on the strategies that represent the greatest potential for delivery of emissions reduction.
ACAPMA believes that the government will need to consider all possible current and emerging options for reducing GHG emission from new and existing road vehicles.
These options include, but are not limited to, the following:
- Battery Electric Vehicle (BEV) and Plug-in Electric Vehicle (PHEV) adoption
This option will require strategies to incentivise early investment in all necessary supply chain infrastructure (both home based and public fast charge systems), rapid decarbonisation of national electricity production (currently averaging 70% coal-fired generation in Eastern Australia), as well as appropriate adaptation of current electricity market settings (i.e. utilisation of cost reflective tariffs and reduced volatility of wholesale prices) if these vehicles are to provide a meaningful reduction in GHG emissions over time.
- Hydrogen Fuel Cell Electric Vehicle (FCEV) adoption
This option will include strategies to support the establishment of cost-effective hydrogen production and the development of cost-effective supply chain infrastructure, because at present, the cost of distribution and refuelling infrastructure is typically 3 to 4 times higher than the actual cost of the hydrogen fuel itself.
- Renewable fuels/advanced biofuels adoption
This option will include strategies to support the development of in-country sourcing of ‘low carbon’ feedstocks and options to improve the affordability of at-scale production of these fuels (i.e. these fuels can fully utilise existing conventional fuel distribution and refuelling infrastructure).
- Synthetic fuels (and efuels) adoption
This option will include investments in in-country production to reduce the current high costs of production. As with renewable fuels/advanced biofuels, these fuels have the advantage of being able to fully utilise existing conventional fuel distribution and refuelling infrastructure).
The first two of the above strategies are likely to provide significant GHG emissions benefit in term of the operation of new light vehicles introduced to the national vehicle fleet between now and 2030. The latter two strategies are likely to provide significant opportunity to reduce emissions from the existing light and heavy-duty vehicle fleet, which will be crucial given that it typically takes more than 17 years to turnover the entire national vehicle fleet.
ACAPMA understands that the Australian Government will commence formal consultation on the six sectoral plans in February 2024 with a view to finalising these plans by early 2025.
The Association will continue to engage actively in the process for the development of the Transport Sector Decarbonisation Plan over coming months in partnership with other industry stakeholders. Further updates will be provided to Members as information comes to hand.