A radical plan to eliminate diesel rebates and replace them with carbon tax could have the transport industry seeing red,
A radical plan to eliminate diesel rebates and replace them with carbon tax could have the transport industry seeing red, for more than one reason.
As well as massively increasing their operating costs, the plan floated by the Greens calls for a mandated minimum of 10 percent biodiesel by 2020.
While this may look good on paper, the reality is no engine manufacturer in Australia will provide a warranty for their products if biodiesel exceeds 5 percent, and this is unlikely to change in the near future.
While biodiesel offers the potential for reducing exhaust emissions and demand for crude-based diesel, manufacturers say there is not enough control over its distillation in Australia.
Despite the Australian Standard for biodiesel being one of the toughest in the world, engine suppliers say the real problem is that it has not been enforced rigidly enough, resulting in a wide variation in fuel quality.
The manufacturers say this can cause major fuel system damage, particularly to modern common rail injection systems, leading to issues over warranty claims.
According to most warranties, if sub-standard fuel is used in an engine, resulting in damage, then the operator is liable for all repairs, which can run as high as $25,000.
The dilemma for manufacturers, is how to balance the public relations nightmare caused by refusing to honour the warranty claims against the cost of repairing damage caused by a third party beyond their control.
For operators, the problem is just as enormous, as they would be required by law to use a fuel that automatically voided their engine warranties, with no grounds to claim compensation.