With the Morrison government set to hand out more than $2 billion in subsidies to Australia’s ailing fuel refineries in a bid to boost ‘fuel security, new analysis has shown that rapidly increasing the uptake of electric vehicles would be the best way to address the challenge, while also slashing Australia’s greenhouse gas emissions.
The most recent edition of the National Energy Emissions Audit, produced by The Australia Institute, shows that emissions from Australia’s transport sector could overtake emissions from electricity generation by the end of the decade.
Australia’s electricity sector currently accounts for around one-third of Australia’s greenhouse gas emissions, at around 170 million tonnes of carbon emissions per year. The transport sector currently accounts for around 18 per cent of Australia’s emissions, or around 90 million tonnes per year.
However, with strong investment in new wind and solar projects, emissions from the electricity sector have been steadily decreasing over the last decade. Meanwhile transport emissions have done the opposite, steadily increasing year-on-year.
While Covid-19 related travel restrictions saw transport emissions fall in 2020, as many switched to working-from-home arrangements, The Australia Institute projects that by 2030, emissions from petroleum use could grow to exceed 125 million tonnes per year. In contrast, electricity emissions are expected to continue their decline, projected to fall to just 111 million tonnes over the same period.
Transport accounts for around 75 per cent of Australia’s petroleum consumption, with most of the remaining consumption occuring in the mining and agricultural sectors.
This would see emissions from petroleum use overtake electricity generation to become Australia’s largest single source of greenhouse gas emissions, underpinning the need for national leadership on supporting the uptake of low and zero emissions vehicles.
“If Australia were serious about reducing greenhouse gas emissions, higher priority would be given to developing and implementing policies to replace petrol fuelled vehicles with low emission alternatives, particularly in the transport sector. Yet no such policy exists or is even being considered,” the Australia Institute’s climate and program director, Richie Merzian, said.
“A direct, and in many ways superior, replacement for petrol fuelled passenger vehicles are Electric Vehicles—a technology to encourage and support in Australia, not denigrate and ridicule, as the Prime Minister did so publicly less than two years ago.”
Author of the National Energy Emissions Audit, Dr High Saddler, hit out at the recent announcement by the Morrison government that it would effectively pay Australia’s last remaining fuel refineries to remain open, arguing that it will do little to actually boost Australia’s fuel security.
“Australia is becoming increasingly fuel insecure, but propping up our remaining oil refineries will not help,” Saddler said.
“It is hard to see the logic of spending public money to prop up the two oil refineries which will remain in Australia—after the two which have already announced their impending closure are gone—given they are old, inefficient refineries that mainly produce petrol, which will be the first fuel to decline with the rise of electric vehicles.”
In the most recent federal budget, the Morrison government has set aside funding for a $2.3 billion bail out for Australia’s last two remaining fuel refineries, which will see public funds used to underwrite the revenues of the refineries for at least the next decade.
Federal energy and emissions reduction minister Angus Taylor argued that the subsidies for the fuel refineries were necessary as a measure to improve Australia’s fuel security.
But in its latest emissions analysis, the Australia Institute argues that reducing Australia’s overall dependence on imported fuels by supporting the uptake of electric vehicles was the best approach to improving overall energy security.
“The best way to increase Australia’s energy security in the medium term would be to reduce consumption of petrol by rapidly switching to electric passenger vehicles, and focus on diesel and jet fuel supplies as the main energy security challenge,” the latest National Energy Emissions Audit says.
The federal budget contained no new funding support for the emerging electric vehicle market, despite Australia significantly lagging behind major international peers in the uptake of new electric vehicle models.
With the market share of renewable electricity in Australia continuing to grow and projected to pass 50 per cent by 2030, shifting transport from petrol or diesel fuels to vehicles powered by electricity provides the potential to achieve significant reductions in greenhouse gas emissions. These reductions will continue to grow as the market share of renewables in the grid increases.