Australia's billions on fuel security: Should some go to electric trucks?

Australia's heavy reliance on diesel fuel, exacerbated by global supply disruptions, has highlighted a critical vulnerability in its economy. Per capita, Australians consume nearly double the amount of diesel as Americans, a consequence of the continent's vast distances and the widespread use of diesel in sectors like mining and agriculture.

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The war in Iran has kicked off the 'largest supply disruption in the history of the global oil market', and it's also drawn attention to something invisible to most Australians, we use a lot of diesel to keep this country running.

The nation's diesel reserves currently stand at 36 days, prompting the government to allocate $11.9 billion towards a National Fuel Security Plan. A significant portion of this budget, $3.2 billion, is earmarked for physically stockpiling diesel and jet fuel, aiming to extend reserves to 50 days. This measure is a direct response to the "largest supply disruption in the history of the global oil market" triggered by the war in Iran.

However, experts like Frances Vierboom, CEO of Rewiring Australia, argue that this approach offers only a short-term fix. She advocates for a long-term solution focused on reducing diesel consumption by electrifying machinery, especially trucks. "Australia has a fuel crisis because so many of its machines still rely on fossil fuels," Vierboom stated, emphasizing that running on "Australian-made electricity" would mitigate inflation in essential goods and reduce global dependency.

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Australia has a fuel crisis because so many of its machines still rely on fossil fuels. The long-term fix for this, where we won't have inflation built into all our groceries, where we aren't beholden to whatever's happening around the globe, is if we run on Australian-made electricity.

While the fuel security plan includes a modest $40 million for electrifying Australia Post's delivery fleet, the broader electrification of the trucking industry has received limited attention. This contrasts with a $3.35 billion tax break for electric passenger cars, which is projected to cost an additional $2.8 billion by 2028-2029. Despite the slow pace of electrification in freight, electric vehicle sales in Australia have surged, reaching a record 23 percent of new car sales in May.

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What we need to do is think about how at each moment that a fossil fuel machine breaks down, we end up replacing it with an electric one.