Senate Environment and Communications Legislation Committee, , 5:40:03 to 5:45:12
Discussion on incentives for reducing diesel consumption at facilities regulated under the Safeguard Mechanism, featuring a case study on mining electrification in the Pilbara.
Topics: Safeguard Mechanism, Emissions reduction, Fossil fuels
Speakers: Andrew Hutchinson, Hon Tim Ayres, Steph Hodgins-May, Bruce Edwards, Varun Ghosh, Mr Andrew Hutchinson, Speaker 27
Um I might briefly return to the diesel question. Apologies for the personnel change again. I think there are some questions that I can ask on that. Um in the absence of that fully formulated Um are you seeing any diesel reduction at safeguard facilities so far when they get paid $194 in fuel tax credits and only have to pay $35 for an ACU?
>> Thank you, Senator. Um we may need some additional colleagues at the table for that. Sure as safeguard sits across two divisions but happy to make some comments that um >> it is probably maybe this one to you but uh I think some of the initial numbers that we're um finding on the safeguard are showing that the net emissions are coming down. The question of exactly where those emissions reductions are coming from the split of onsite offsite is uh further level.
>> I'm sorry can you please repeat your question?
>> Yeah. Are you seeing um any diesel reduction at safeguard facilities um when they're getting paid $194 in fuel tax credits per ton and only have to pay 35 for an ACU?
>> Perhaps I can that one Bruce Edwards division head adaptation future industries um uh as Mr. Hanson mentioned there. So under the safeguard mechanism uh it obviously sets a level um and it it declines but people then have flexibility about how they deploy different savings. There are facilities which are reducing um diesel. Um so in fact last week I was um visiting a fordscue um mine in the Pilra. Um and they are well and truly on the way of um uh getting rid of diesel outright um from their facilities within the next 18 months and they have something like a million lers a year. Quite a quite a large figure. um and doing really impressive things but also seeing the economic gains in doing that as well with electrification from everything from trucks to diggers to all the smaller vehicles they have.
>> Two more questions on this block. >> Sorry, my apologies. Um numerous reports show Australia is the biggest importer of diesel and the biggest consumer of diesel per capita in the world. Um what are we going to do to shake our exposure from this imported fossil fuel that it's driving inflation across the country?
Senator make some initial comments to that but colleagues can also jump in. So um coming back to some comments made made earlier to Senator PCO within the context of the legislative net zero commitment and its interim targets. There are a range of different policies that have different effects. We've talked briefly about the safeguard that does provide an economic incentive for companies to decarbonize. They'll do that where they can see in most cases the most cost effective way of doing that. In some cases that's through um reducing diesel use for you know efficiency measures or switching to alternative fuels or processes. Mr. Edwards has talked about electrification at some mine sites for example. Um below safeguard facilities different policies apply and we've talked briefly earlier in the day about the new vehicle efficiency scheme uh standard rather which is is providing Australians with greater options for efficient vehicles. You'll see some switch from previous motorist driving diesel vehicles to more efficient or different say electrified vehicles. Uh there's also work underway with the government's I believe $1.1 billion commitment to a lowcarbon liquid fuel um you know uh demand side measure.
>> Sorry to interrupt. So is there anyone apart from Fordscq reducing diesel use?
>> There's a there's a range um senator but again they don't generally report to us exactly how they've achieved their emissions targets. So they just equit to the um clean energy regulator. So we would certainly have other case studies where people
>> do you mind um providing those on notice?
>> Yeah, happy to see what we can get you. Yeah.
>> Yeah. If we can provide the sort of topline kind of um case studies, I think the the the safeguard mechanism is expected to deliver a reduction in diesel use of about 18 billion lers by 2035. Um you're right to say that Australia is
>> I'm just curious in that figure. Thank you, Minister. But um versus how many offsets they're using. So just just to clarify
>> that's so so the the way that the mechanism works of course is that firms go to the lowest cost reductions that they can first uh and that um you know the h that the further you go into the operation of the the more likely um that is that harder to abate questions like diesel use um become the subject of practical action. So 18 billion LERs by 2035. Um there are measures like $70 million financing for Volvo to um accelerate electrification of trucks. Um the um every 100,000 electric vehicle sales takes about 3 days of national petrol consumption every year.
>> Minister, just so each of the practical
measures that Senator Hoden, I'll come back to you once um with you to the coalition. Um Senator Pson,