HVIA has shared broader industry concerns about proposals to expand the Federal Government’s Safeguard Mechanism, warning that climate policy must support investment in Australian manufacturing and industrial capability rather than inadvertently accelerating its decline.
In a recent submission to the Government’s 2026-27 Review of the Safeguard Mechanism, the Australian Chamber of Commerce and Industry (ACCI) argued against lowering the scheme’s emissions threshold below the current 100,000 tonnes CO2-e level, citing growing pressure on Australian manufacturers and industrial operators.
The Safeguard Mechanism plays an important role in Australia’s emissions reduction framework, but ACCI has raised concerns that increasingly stringent settings risk imposing significant compliance costs on businesses already facing intense international competition, rising energy costs, workforce shortages and broader economic pressures.
For Australia’s heavy vehicle industry, the review arrives at a critical time.
Manufacturers, suppliers, body builders, component producers, repairers and transport operators are already investing in lower-emission technologies, including battery electric vehicles, hydrogen-fuelled platforms, renewable diesel, advanced fleet management systems and more efficient manufacturing processes. However, the transition requires sustained investment, supportive policy settings and commercially viable pathways to deployment.
HVIA supports emissions reduction policies that encourage innovation and technology adoption while maintaining Australia’s industrial capability and skilled workforce.
Recent years have seen several major industrial closures across manufacturing, chemicals, refining and processing sectors. ACCI argues that a reduction in Australia’s industrial base should not be mistaken for a successful decarbonisation outcome if production simply moves offshore to jurisdictions with less stringent environmental standards.
This concern resonates across the heavy vehicle supply chain.
Australia’s truck and trailer manufacturing sector relies on a complex network of domestic suppliers, materials producers, engineering services and logistics operators. The loss of industrial capability in one sector often has ripple effects throughout the broader economy, impacting supply chains, investment confidence and sovereign manufacturing capacity.
Rather than broadening the scheme’s reach, industry groups are calling for greater focus on measures that help businesses invest in commercially viable emissions reduction technologies.
For the heavy vehicle sector, that includes accelerating charging and hydrogen refuelling infrastructure, supporting renewable fuels, encouraging fleet renewal, improving freight productivity and facilitating the deployment of low-emission manufacturing technologies.
The industry’s decarbonisation challenge is significant. Heavy freight vehicles perform essential economic functions and often operate in applications where technology alternatives are still emerging or remain commercially challenging. Policy frameworks therefore need to recognise operational realities and support a practical transition.
HVIA has consistently advocated for technology-neutral approaches that allow businesses to select the most suitable pathway for reducing emissions while continuing to meet customer needs and maintain productivity. Market-based mechanisms are needed that provide flexibility and investment certainty, helping businesses plan long-term capital expenditure and infrastructure investments.
According to CEO Todd Hacking, “HVIA supports policies that reduce emissions while strengthening Australia’s industrial capability. The heavy vehicle industry is investing in new technologies and lower-emissions solutions, but the transition must be practical, internationally competitive and supported by policies that encourage investment rather than discourage it.”