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Supporting future fuel technologies and consumer choice

5 February 2021

Joint media release with Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack

Australians should be able to choose the type of car they drive and the Morrison Government will continue to empower them in making these new technology decisions.

Today, the Government has released a discussion paper to further inform the development of Australia’s Future Fuels Strategy.

The Future Fuels Strategy Discussion Paper outlines the Government’s vision to create an environment that enables consumer choice, stimulates industry development and reduces emissions in the road transport sector.

The paper considers the role of a mix of technologies, including traditional fuel, hybrid, hydrogen fuel cell, electric and bio-fuelled vehicles.

The Government will focus on three principles to support the future fuels sector: 

  • addressing barriers to the roll out of new vehicle technologies to increase consumer choice;
  • investing in early-stage technologies to stimulate the market and drive private sector investment; and
  • giving Australians access to the right information to help them make informed choices.

This will foster Government action in areas where current trends in consumer choice can be supported, and on sectors that can derive the most benefit from adopting new technologies first.

Minister for Energy and Emissions Reduction Angus Taylor said the future of road transport in Australia will be a mix of vehicle technologies and fuels.

“Australians are already making the choice to switch to new vehicle technologies where it makes the most economic sense, with hybrid sales doubling last year,” Minister Taylor said.

“We are optimistic about how quickly the technology cost will reduce for other electric vehicles compared to traditional cars, making it an easier choice for consumers.

“Importantly, this discussion paper shows that closing this gap through subsidies for new technology vehicles is not value-for-money for taxpayers and is an expensive form of abatement. Depending on the vehicle type and use, this would cost up to $747 per tonne of carbon dioxide equivalent or up to around $8,000 over the life of a vehicle. Fleets is where this gap will close first.

“We’re focusing on five priority initiatives where it makes the most impact to take action first, including commercial fleets, essential infrastructure and improving information to better inform motorists.

“The Government can also foster this change by making sure our electricity grid is ready for these new technologies. Our approach will help motorists to embrace the increasing range of technologies that are available and keep Australians moving.”

The five priority initiatives cover the following areas:

  • Electric Vehicle (EV) charging and hydrogen refuelling infrastructure where it’s needed
  • Early focus on commercial fleets
  • Improving information for motorists and fleets
  • Integrating battery EVs into the electricity grid; and
  • Supporting Australian innovation and manufacturing. 

Deputy Prime Minister Michael McCormack said the Strategy would be underpinned by significant Government investment.

“We are backing this with substantial funding, including the $74.5 million Future Fuels Package and the $24.5 million Freight Energy Productivity Program,” the Deputy Prime Minister said.

“This forms part of the King Review Technology Co-Investment Fund and the ARENA-administered grants program will help heavy road freight businesses evaluate fuel efficiency technologies for both diesel vehicle or new technology fleets.”

Managing the increased uptake of new road transport technologies involves all levels of government, the community and industry.

The Coalition’s policy is focused on enabling consumer choice and supporting natural uptake when it comes to new vehicle and fuel technologies. Modelling shows Labor's policy is a car tax that will increase the price of cars by up to $4863 to force people out of the cars they love and into EVs.

The Government is inviting input through this discussion paper to help shape the final Future Fuels Strategy. Feedback will also help to influence the design and roll out of Government investment programs, including the Future Fuels Fund, and inform the Commonwealth’s priorities for ongoing work with states and territories.

To contribute to this important national conversation through the discussion paper or learn more about the Strategy process, visit: https://consult.industry.gov.au/climate-change/future-fuels-strategy/

Written submissions are open until Friday, 2 April 2021.

The final Future Fuels Strategy is expected to be released in the first half of 2021.

Media contact:

Minister Taylor's office: 02 6277 7120