Decarbonising Diesel Industries

Diesel fuel remains the dominant energy source powering Australia’s mining, land freight, agriculture, fisheries and forestry sectors. It supports critical machinery, transport vehicles and infrastructure essential to the nation’s economy and exports. However, this reliance on diesel comes with significant environmental, health, economic and strategic risks.

Diesel combustion contributes approximately 17% of Australia’s total carbon emissions, posing a major obstacle to meeting the country’s climate targets of a 43% reduction by 2030 and net zero emissions by 2050. Australia imports nearly 29 billion litres of diesel annually, reflecting a heavy dependence on international fuel markets and diminishing domestic refining capacity. This reliance presents national security vulnerabilities due to geopolitical risks and potential supply chain disruptions.

Despite these clear challenges, current policy settings inadvertently support diesel use by subsidising fossil fuel consumption. This delays critical investment and adoption of cleaner technologies.