How to reduce carbon emissions from trucks - Grattan Institute

In all the noise generated by the recent electric vehicle summit, you could be forgiven for thinking that cars are the only carbon emitters worth worrying about. But trucks cause 4 per cent – and rising – of Australia’s total carbon emissions.

Reducing truck emissions to zero by 2050 may be a bridge too far, but there’s plenty that the government could do to shrink the carbon emissions from diesel trucks (for as long as they remain the dominant type of truck on our roads), as well as to accelerate the uptake of electric and hydrogen trucks.

The new federal government is well on the way to legislating its target of a 43 per cent emissions reduction on 2005 levels by 2030, and net-zero by 2050. And it’s planning to achieve these targets using sector-specific policies. While cars and other light vehicles can realistically achieve zero emissions by 2050 at reasonable cost, it’s a much tougher ask for trucks.

Right now there are very few zero-emissions trucks in Australia. Even in Europe, where electric cars are edging towards a quarter of new car sales, only about 2 per cent of trucks sold in 2020 were electric, whether that electricity comes from a battery or hydrogen fuel cell.

Electric trucks are much cheaper to run, but they cost more to buy. For an articulated truck, the difference can be as much as $200,000. But per kilometre, electricity costs far less than diesel, and fewer moving parts means lower maintenance bills. We’re not far off the point where the cost of owning and operating an electric truck falls below that of a comparable diesel truck; by about 2027 for many rigid trucks, and 2030 for articulated trucks.

The bigger barrier to switching to zero-emissions trucks is refuelling. Diesel trucks can refuel quickly at service stations, but publicly accessible hydrogen refuelling stations and battery-charging stations are few and far between. Battery-electric trucks can also be slow to recharge, eating into the time a truck can spend on the road – and therefore eating into profits the truck company can make. But ultra-fast chargers and battery swap programs are shrinking this barrier.

Around the world, the most common way to reduce truck emissions is to impose an emissions ceiling, and then gradually lower the ceiling over time. The federal government may introduce such a scheme for light vehicles, but because trucks come in a much wider variety of configurations than cars, it’s more complicated, and we’ve probably missed the boat.

Instead, Australia should cherry-pick the two types of technology that have been proven overseas to deliver particularly low-cost emissions reductions: more fuel-efficient engines, and tyres with less rolling-resistance. These are the innovations that manufacturers often choose to meet emissions limits in those countries that have imposed a ceiling.

An ambitious but achievable goal would be for new truck engines to be 3 per cent more fuel-efficient, on average, year-on-year, compared to a 2022 truck. For tyres, it should be feasible to improve the average rolling-resistance to yield carbon emission reductions of about 1 per cent per year.

Zero-emissions trucks will become a more attractive option over time, as the purchase price comes down and refuelling options expand. But the federal government could speed this up by introducing binding sales targets, which ratchet up over time. The target for new sales of rigid trucks should start at just 2 per cent, but reach 100 per cent by 2040. For articulated trucks, a realistic target would be 1 per cent at first, rising to 70 per cent by 2040.

Grattan Institute modelling shows the community benefits of zero-emissions sales targets could be worth more than $4 billion in monetary terms between 2024 and 2040. These benefits include not just the carbon emissions avoided, but also a significant reduction in respiratory and other diseases, due to the elimination of exhaust-pipe pollutants. There would also be a welcome reduction in noise pollution.

Of course, electric trucks are only as clean as the source of the electricity that powers them, and Australia’s grid is a long way from being fully powered by renewable electricity. But even today, based on the average emissions intensity of the main Australian energy grid, an electric truck has a substantially smaller carbon footprint than a comparable diesel truck. As Australia’s energy mix shifts to renewables, the environmental and health benefits of zero-emissions trucks will increase.

The average Australian truck is 15 years old, and there are trucks on the road today that are more than 40 years old. A truck that’s bought today is with us for the long haul. Lower-emitting trucks are one of the easier options we’ve got on the difficult journey to net-zero by 2050.

Marion Terrill

Transport and Cities Program Director
Marion is a leading transport and cities expert with a long history in public policy. She has worked on tax policy for the federal Treasury, and led the design and development of the MyGov account. She has provided expert analysis and advice on labour market policy for the Federal Government, the Business Council of Australia, and at the Australian National University.

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