Last week, Heavy Vehicle Industry Australia sent a joint letter to Minister for Climate Change and Energy Chris Bowen and Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King calling for a technology agnostic incentives scheme to assist the decarbonisation journey for heavy vehicles.
We proposed a national incentive scheme that should include:
- Subsidies for the purchase of zero- and low-emission trucks.
- Support for fitting existing diesel trucks with technologies that reduce emissions, such as aerodynamic modifications, and idle reduction systems.
- Infrastructure development funding, including heavy vehicle charging and refuelling stations.
This week, the Productivity Commission released their interim report into the net zero transition and stated that “[i]ncentives for heavy vehicle operators to reduce emissions are inadequate. The Australian Government should introduce a new, technology-neutral policy to reduce emissions from heavy vehicles.” HVIA welcomes the PC’s call for a new emissions-reduction incentive to cover heavy vehicles.
As we know, incentives are required to assist the sales of zero-emission vehicles: European Data Reveals Incentives Drive Results – Heavy Vehicle Industry Australia. HVIA provided a formal submission to the PC prior to the publishing of the present report, and it is pleasing to see some of our ideas have been included.
The report acknowledges that while incentives are a necessary part of the transition, they are not the only lever. Industry also requires better regulation, tools to measure emissions, access to the relevant infrastructure, and the right policy settings to encourage private investment. Barriers were also acknowledged, including the lack of charging and refuelling infrastructure, variable weight limits on roads, and high costs for a competitive industry with low-margin businesses.
To address the barriers and improve policy settings, the PC suggested reviewing the following:
- The Safeguard Mechanism, which the PC proposes to reduce the threshold from 100,000 tonnes of CO2-e per year to 25,000
- They state that the number of transport facilities captured in this range is small.
- Australian Carbon Credit Units (ACCUs)
- The Department of Climate Change, Energy, Environment and Water is reviewing the methodology of how these are calculated and HVIA has contributed to this process.
- The exemption of electric vehicles from the Fringe Benefits Tax
- They state that this should include the phasing out of EV’s from stamp duty and registration discounts at state level.
- Present Road User Charge (RUC) settings
- They indicate that there is no incentive for operators to pursue renewable diesel under the existing RUC – it is taxed at the same rate as regular diesel
- They propose several options to review the RUC, including potentially increasing the rate of fuel excise paid by users of heavy vehicles, including reducing the refunds received by heavy vehicles that do no use public roads.
HVIA is working through the proposals contained within the report, and plans on providing a full response by the September 15 deadline. Reach out if you’d like to discuss this with Adele Lausberg (a.lausberg@hvia.asn.au) as there’s more to unpack that we’d like member feedback on.