Roadblocks still abound en route to decarbonisation of Australia's freight industry
UNSW
Freight is critical to Australia’s economy but a UNSW expert is warning the industry is falling behind on the road to net zero.
Freight supply chains underpin nearly every sector of the economy, delivering petrol to service stations, food to supermarket shelves and goods to retail centres across the country.
But the freight industry is under growing pressure as it struggles to align with Australia’s sustainability targets - with the sector still heavily reliant on diesel-powered transport.
Transport engineering expert, Dr Elnaz Irannezhad from UNSW’s School of Civil and Environmental Engineering, warns that without urgent innovation and coordinated policy action, the industry risks becoming a roadblock to Australia’s path to net zero.
“From our ports and rails to our intermodal terminals, where containers are moved between different modes of transport, almost all our freight fleet currently runs on diesel fuel,” she says.
“There is a huge opportunity to decarbonise the freight and logistics sector – and it starts with collaboration between industry, researchers and government.”
Are we headed in the right direction?
Transport accounts for approximately 21% of Australia's total greenhouse gas emissions.
Heavy freight makes up about 40% of transport emissions and represents approximately 7% of Australia's total emissions. According to the Federal Government’s Emissions Projections 2024 report, freight emissions are expected to increase by 16% by 2040, due in part to the slow uptake of electric heavy vehicles.
“Compared to Europe, where green fleet adoption is further advanced, Australia’s freight challenge is unique,” says Dr Irannezhad.
“Our population and infrastructure is spread over vast distances, which makes electrification more complex.”
Regulatory inconsistencies between states
Bigger distances require bigger batteries for electric freight vehicles. Over the years, most state transport authorities have increased the axle mass limits for the next generation of zero emission heavy vehicles to accommodate for the heavier battery load.
While this was a welcomed move from the industry, there are still inconsistencies in limits between states and territories.
In NSW, zero-emission heavy vehicles can have higher axle weight limit of up to eight tonnes and a tandem drive axle limit of up to 18.5 tonnes, as long as the total gross vehicle mass does not exceed 26 tonnes.
Across the border, Victorian heavy-duty electric trucks can only operate with a 7.5 tonne weight on the steer axle – half a tonne less than NSW.
“There is a lack of harmonisation in load per axle regulations across Australia,” says Dr. Irannezhad.
“Electric vehicles that comply in one state can become non-compliant once they cross the border, adding another barrier to adoption.”
E-commerce growth puts pressure on supply chains
In 2024, nearly 10 million households made a purchase online, contributing to a record $A56 billion in domestic e-commerce spending. Globally, the market was worth over $US6.3 trillion.
With many retailers now offering same or next day delivery, there is further pressure on the freight and logistics supply chain to move goods to consumers even faster.
“During the COVID-19 lockdowns, the closure of shops meant consumers were doing their shopping online – and that behaviour has stuck around,” says Dr. Irannezhad.
“Orders that would have once taken days or weeks to be delivered can now arrive on your doorstep the same day or even within a few hours.
“Companies are working around the clock on fulfilling the last mile delivery expectations.”
Last mile delivery – the final leg in the delivery chain from the manufacturer to the customer’s doorstep—is a major contributor to urban congestion.
Dr. Irannezhad says there’s been a rise of micro hubs or local fulfillment centres to keep up with demand, especially in larger cities such as New York.
“In Australia, a majority of the fleet making these last mile deliveries are not electric – especially when you move further away from the city centre,” she says.
“If we want to reduce environmental impacts, we must connect these fulfilment centres with sustainable transport options.”
What needs to happen next?
Dr. Irannezhad says the challenge of investing in high-powered charging infrastructure mirrors a familiar dilemma: which comes first — the vehicles or the charging stations?
Without widespread charging infrastructure, freight companies are hesitant to adopt electric trucks. But until more low-emission vehicles are on the road, there’s little demand to build the infrastructure.
“The same can be said about importing low emission trucks to Australia. Since we’re a smaller market, the technologies available to us are seven years behind the United States and countries in the European Union.”
Similar to the recent New Vehicle Efficiency Standard (NVES) which aims to reduce emissions from new passenger vehicles and light commercial vehicles, Dr. Irannezhad says we also need a fuel-efficiency standard for heavy vehicles.
“Currently, heavy vehicles in Australia must comply with Euro V emissions standards under the Australian Design Rules. While these standards regulate criteria pollutants such as CO, HC, NOx, they fail to address CO2 emissions which is directly linked to fuel efficiency,” she says.
“In stark contrast, the United States, European Union, India and Canada all have mandated heavy vehicle emissions standards for decades.
“For example, the European Union has set emission reduction targets for heavy-duty vehicles (HDV) aiming for a 15 per cent cut by 2025, 30 per cent by 2030, and 45 per cent by 2035, with the ultimate goal of 100 per zero emission HDV sales by 2040.
“If Australia is serious about meeting our emission targets, we need to raise the bar.
“More incentives and subsidies and clear fuel-efficiency standard for heavy vehicles are just some of the ways we can help lower our emissions.”
Contact details:
Cecilia Duong
(02) 9065 1740